branson called it insanity
http://www.guardian.co.uk/business/2...ainline-insane
from his blog
Quote:
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"We also did not want to risk letting everybody down with almost certain bankruptcy at some time during the franchise as happened to GNER and National Express who overbid on the east coast mainline. Sadly the government has chosen to take that risk with FirstGroup and we only hope they will continue to drive dramatic improvements on this line for years to come without letting everybody down."Insanity is doing the same thing over and over again and expecting different results. When will the Department for Transport learn?"
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Would not be shocked to see another national coaches fiasco around corner. Seems the general concensus is they overstretched to get the franchise.
http://www.fool.co.uk/news/investing...oofolrf0010002
what I find strange why there shares bumped 20% over the month leading up to the bid anouncement when they sealed unknown. Sounds strange since bid anounced win there shares fallen 4% likely Probably at the costs bid maybe these ambitious growth forcasts.
Quote:
FirstGroup's revenue assumptions do seem rather heroic, as they are expecting a 10.4% compound annual growth rate in revenue, compared to 8.5% projected by Virgin Trains. The franchise is already generating annual revenues of around £900m.
Some of the key improvements promised are 11 new six-car trains for the Birmingham to Scotland route, a reduced 15-minute journey time between Glasgow and London, new direct services from London to Blackpool, Telford, Shrewsbury and Bolton, plus a 15% reduction in Standard Anytime fares.
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As for side note dont know how this thing works but what happens to virgin investment. Does first pay them back or they lose out financially now they lost franchise.
Another why are governemt contracts in other sectors not run the same way. Seems strange why we pay companies like ATosers, g4sawol when train companies have to bid for contracts pay government.