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Go-Ahead boss: Troubled train division 'doesn't make any money'

Published 02/09/2016

Go-Ahead Group apologised to customers of its Southern rail franchise for months of disruption, as it reported a 27% rise in profits
Go-Ahead Group apologised to customers of its Southern rail franchise for months of disruption, as it reported a 27% rise in profits

The boss of Go-Ahead Group, which operates the troubled Southern rail franchise, has insisted the firm is not profiting from passengers' misery - despite the firm booking annual profits of almost £100 million.

Chief executive David Brown told the Press Association that Southern operator Govia Thameslink Railway (GTR) "doesn't make any money".

He said: "Yes, we make a profit, we are a PLC, of course I'm here to make profits. The profits and the dividends we're able to pay out are due to the performance of the bus division. GTR doesn't make any money, it's being subsidised by other parts of the business.

"If I wasn't making a profit across the group then how would I be able to cope with losses at GTR? We are not profiting from disruption."

His comments come after Go-Ahead, which owns 65% of Southern operator Govia Thameslink Railway and runs bus networks, saw full-year profits soar 27% to £99.8 million while revenues rose 4.5% to £3.4 billion.

Passengers have suffered months of delays and cancellations because of a dispute over changes to the role of conductors and staff shortages - blamed by the company on high levels of employee sickness.

A number of politicians and trade unions expressed their anger at the profit figures, with London mayor Sadiq Khan claiming commuters will be "shocked".

But Mr Brown said that he sees an end in sight to the misery.

"On Monday we'll start reintroducing our timetable and we aim to be back to normal by the end of October," he said.

Mr Brown turned down the opportunity to be considered for an annual bonus, declined a salary increase and apologised to passengers for the Southern chaos.

On Thursday, the Government was accused of giving a taxpayer subsidy to Southern after announcing a £20 million package to "get to grips" with delays and disruption which have plagued the company for months.

The chief executive said he "applauds" the intervention, but insisted that the cash is not a subsidy.

"Let me be clear, the money does not come to us. Network Rail, which is a public body, will be spending it on infrastructure, in no way is it a subsidy to Southern."

Rail, Maritime and Transport (RMT) union general secretary Mick Cash ripped into the firm, saying: "While Go-Ahead have been driving Britain's biggest rail franchise into total meltdown, the cash has been sloshing through the boardroom at obscene levels. This is reward for total failure on a scale which is off the map."

Asked who is to blame for the disruption, Mr Brown said he wants the RMT to be "part of the solution, not the problem".

Mr Brown - who said that he commutes to work by Tube every morning, taking him 50 minutes in standing-room only carriages - apologised to passengers for the disruption to services.

He said: "A large part of the role of the GTR franchise is to introduce three new train fleets and modernise working practices. During this period of change, Southern services have been disrupted by restricted network capacity, strike action and increased levels of absence.

"We apologise to the people whose lives have been affected during this time. We continue to work closely with the DfT (Department for Transport), Network Rail and other suppliers and partners to operate the best service possible while delivering the long-term improvements."

Southern was given some good news when the RMT called off a planned 24-hour walkout on September 7 in a row over ticket office closures.

But the union is pressing ahead with a 48-hour stoppage on September 7 and 8 over the deadlocked guards dispute, which will cause fresh travel misery for hundreds of thousands of passengers.

Go-Ahead said it plans to move ahead with introducing new on-board train supervisors, saying it is a "step in the right direction".

A DfT spokesman said: " Improving rail services for Southern passengers is a priority for the Government and for the operator.

"With Network Rail committing £20 million to address infrastructure issues on this part of the network announced this week, we expect to see positive changes as the company continues to strive to deliver more reliable train services in the face of unjustified industrial action."

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