The worst-performing rail operator in Britain, which has severely cut back its services, is revealed to have paid out more than £11m in shareholder dividends last year.
Avanti West Coast, the operator of the west coast mainline, provoked passenger outrage last week by cutting services. The number of trains running from London Euston to Manchester has fallen from three an hour to just one.
Passengers were this weekend warned to prepare for more disruption after strike action on Saturday. Union bosses said Grant Shapps, the transport secretary, should enter meaningful negotiations instead of “closing ticket offices” and “bailing out the private rail companies”.
Avanti, jointly owned by FirstGroup and Italian rail operator Trenitalia, faces fresh criticism over a payout of £11.5m in dividends for the year to 31 March 2021. Over the same period, the train operator was paid a franchise subsidy of £725m to help cope with the impact of the pandemic.
Louise Haigh, shadow transport secretary, said: “Ministers have rewarded abject failure, handing over millions of pounds in performance bonuses and fees to this failing operator.
“It is scandalous that despite the abysmal service, taxpayers’ money flowed straight into the pockets of shareholders. It’s time for ministers to do their job and hold this failing operator to account.”
Avanti took over the running of the west coast mainline from Virgin Trains in December 2019. It is 70% owned by FirstGroup and 30% owned by Trenitalia. Company officials describe the dividends as inter-company payments into consolidated accounts, and said payments from the government were fees to run a service.
The operator was second bottom in the performance table for late trains in 2020-21 and was bottom in 2021-22. It has received more than 50,000 complaints over the last two years, the highest number of any operator.
Ministers were accused last week of rewarding Avanti for failure after it was paid £17m in performance and management fees in 2020-21, including about £4m in payments for or “operational performance”, “customer experience” and “acting as a good and efficient operator”.
More than 45,000 rail workers were on strike on Saturday in the dispute over pay, jobs and conditions. Mick Lynch, general secretary of the RMT, warned of further action. “I think we’re seeing public support for this dispute entrenching,” he said. “I think the British public are fed up with being ripped off by this government and by corporate Britain.”
An Avanti spokesperson said: “We understand and apologise for the enormous frustration and inconvenience felt by our customers at the moment. The decision to reduce our timetable was due to the ongoing industrial action, which has seen short-notice availability of drivers to work additional overtime.”
A Department for Transport spokesperson said: “We are meeting with Avanti West Coast regularly to discuss its performance and delivery for passengers.
“This includes ensuring effective plans are developed to improve its services, including mitigating issues outside of its control.”
