A deal struck between Go-Ahead Group PLC’s (LON:GOG) Govia Thameslink Railway (GTR) and the Department for Transport (DfT) could have implications for other UK rail operators that have suffered recent travel chaos.
Under the agreement, GTR will be allowed to keep its rail franchise despite disruptions caused by strikes and timetable changes but it will not be allowed to make a profit for the remainder of the financial year.
GTR, which operates Thameslink, Southern and Great Northern, was also ordered to spend £15mln on “passenger enhancements”.
The railway group has already paid towards £15mln in compensation for passengers affected by the disastrous introduction of a new timetable in May.
The DfT said the recent travel chaos was “unacceptable” but decided that terminating the franchise was not an appropriate course of action because it would cause further and undue disruption for passengers.
David Brown, the chief executive of Go-Ahead, which owns 65% of GTR, said: "We recognise that the industry-wide failures in delivering the May timetable created huge difficulties for our customers, and we are sorry for the poor service they received.”
GTR not alone in suffering travel disruptions
However, GTR is not the only rail operator in hot water over recent travel disruptions.
Services at South Western Railway, a joint venture between FirstGroup PLC (LON:FGP) and MTR Europe, have been hit by several strikes this year in a long-running dispute over the role of guards on trains.
Earlier this year, FirstGroup’s Great Western Railway cancelled and delayed services due to a “critical” shortage of trains.
Transport committee slams 'appalling services'
The Transport Select Committee on Tuesday called for a series of reforms for railways in a scathing report into the botched introduction of new timetables in May.
According to the report, GTR failed to run one in eight of its planned 3,880 daily services after the schedule changes.
It said one in nine services on Arriva Rail North, which operates Northern rail services, did not run following botched May timetable changes while FirstGroup’s TransPennine Express passengers were also badly affected.
Around a fifth of rail passengers have suffered "appalling services and been very badly let down" by the whole system, the committee’s report said.
Labour’s Lilian Greenwood, who chairs the committee, said: “It is extraordinary, and totally unacceptable, that no one took charge of the situation and acted to avert the May timetabling crisis."
The committee said the transport secretary, Chris Grayling, should have taken a “more proactive approach” in addressing the issues.
Grayling has announced an independent review into the state of the railways but Greenwood said commuters should not have to wait until 2020 for reforms to be implemented.
MPs call for fare freeze for commuters worst affected by rail timetable issues
The committee proposed a freeze on fare increases for season ticket holders most affected by the timetable fiasco on Thameslink, Great Northern, Northern and TransPennine Express.
Ticket prices are due to increase by an average of 3.1% from 2 January 2019.
MPs also recommended that passengers be consulted for future timetable changes and move towards 'one-click' automated compensation to make claims easier for those affected by disruptions.
A DfT spokesperson said: “We have already worked with the industry to deliver special compensation schemes on Northern, TransPennine Express and GTR, which provides the equivalent of up to 8% of the cost of an annual season ticket for those most severely impacted.”