Cross-Channel Rail Competition: Richard Branson’s Virgin Group has big plans for European trains. More convenient and interconnected rail cross-channel service plans to launch but Virgin aim to raise the fund its bid which is about £700 (or $900 million) to make it happen.
Virgin Group’s Big Bet on European Rail
The new service is marking the first direct challenge to Eurostar’s three-decade monopoly. The funding plan to make it happen includes £300 or $400 million in stock and £400 or $500 million in debt. Virgin plans to be an equity investor in this plan. They will play a big role in making sure the funding works.
New Routes: Expanding Beyond London-Paris-Brussels
After intercity train services, he plans to launch a new train which travel across London- Paris to Brussels and it would also extend later and connected to the Amsterdam. Company confirm this report in Financial Times first, later in the Reuters.
Virgin got the idea “Improving Customer Experience with Innovation”
Virgin acknowledges the truth of facing difficulty in catching a train in the channel tunnel so how to make it easy? And in the crowded station another problem happened in finding a room. The new train has more capacity to contain more passenger Robert Sinclair is the CEO said. They need more space to fix their trains. Both want that it would be UK’s only International rail spot.
Key point of Virgin strategy
Business Strategy:
Virgin’s plan to buy 12 high speed train, the deal is worth £500m to the company like Hitachi, Alstom, Talgo and Siemens. This shows that Virgin making a big move to spend a lot.
Service Offering
Virgins promises “more choices” and “better prices” indicate that we might see competitive fares, new routes and flexible ticketing advancement.
Pricing and marketing
Virgin could escalate a price competition by lowering the price and benefiting the passenger some people are sensitive about that they might choose to travel.
Infrastructure and operation
It is difficult to get access in Temple mills depot and St pancreas slot because it controls by Eurostar. So, virgin want the third-party ORR to step in and solve the issue.
Customer Experience
Past innovation of virgin was affective to the people like automatic delay compensation and entertainment system. This time will be more flexible systems are provided to the customers.
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Cross-Channel Rail Competition: Who Will Win?
Disruption vs Stability: Virgin goes at price competition and they are a new company, Eurostar is stable and grow slowly and steady.
Scope: virgin aim to secure New train lines in Germany and Switzerland. Eurostar are growing using the Thalys train routes. They are playing safe by sticking to the routes they know.
Risk: virgin’s new idea has consumed high risks that untested funding and depot access is quite big risk. Eurostar has proven system this minimizes uncertainty.
Brand: while virgin is a customer-friendly brand that put customers first, Eurostar is high-quality service provider on which you can rely on.
Conclusion:
Virgin’s wants to changes things up for providing more reliable services to the customer by challenging Eurostar and Eurostar focuses on what it does best but they accept this challenge of an outsider company to resolve the space issues. If Virgin wins, Eurostar may have to change. They might need to lower prices. If Virgin fails, Eurostar’s plan will stay on top. The key is how well Virgin can do this. They have big goals. But Eurostar is a strong, established player.
