Virgin Trains will be losing the contract to operate West Coast trains as early as November.
Stagecoach, which partners with Virgin Group to run the West Coast contract, was disqualified from all UK rail franchise bids yesterday. This means that it is now out of the running to win a further extension to the West Coast deal. Abellio will take over East Midlands Trains, which Stagecoach currently runs on a stand-alone basis.
The fall-out is over the £6bn funding gap in the Railways Pension Scheme. In theory, the train operating companies are liable for much of this even though most of the deficit was incurred before privatisation.
The pensions regulator can, at any point, demand that the funding gap be reduced. Stagecoach was not willing to bid for rail contracts if it felt that it could be asked – on any random day – to hand over hundreds of millions pounds towards the deficit. This led to the Government disqualifying all of the current Stagecoach bids yesterday.
You can currently earn Virgin Flying Club miles, or Nectar points, when you book West Coast train tickets and book directly with Virgin Trains. There is little chance of Flying Club miles being offered by whoever takes over the contract – which could be as soon as November – although there is a chance that Nectar remains given that it partners with numerous rail operators.
You can find out more about earning miles with West Coast here.
(Want to earn more Virgin Flying Club miles? Click here to see our recent articles on Virgin Atlantic and Flying Club and click here for our home page with the latest news on earning and spending other airline and hotel points.)