Abellio ScotRail says lockdown to blame for huge £64.5m pre-tax loss

Rail operator Abellio ScotRail has blamed the impact of the coronavirus lockdown for a £64.5 million black hole in its finances – despite lockdown only coming into force in the final weeks of the current accounting year.

Abellio said in its statement lodged with Companies House that lockdown restrictions had had a “significant” impact on its financial performance.

In its latest financial statement, for the year ending March 31 2020, the Dutch transport giant posted a huge pre-tax loss of £64.5m.

The firm, which operates Scotland’s rail services, had previously posted after-tax losses of £10m for the 15 months up to March 31 2019.

Abellio said in its statement lodged with Companies House that lockdown restrictions had had a “significant” impact on its fiscal fortunes.

However, the coronavirus lockdown only came into effect during the two weeks of the last accounting period, leading to questions over the large increase in losses.

In its statement, Abellio said: "As a result of government intervention telling people not to travel, there was a significant reduction in passengers travelling with Abellio ScotRail (up to 95% reduction on the prior year).”

The firm’s turnover for year was £917m, down £72m from the previous accounting period, with passenger revenue dipping to £360m from £445m in 2019.

Abellio ScotRail’s subsidy from Transport Scotland increased to £526m over the course of 2020, which saw the transport operator face unprecedented challenges.

Since March of last year when the lockdown was announced, the Scottish Government has also been supplying the rail operator with emergency funding to plug the financial shortfall caused by the sharp and sudden decline in passenger numbers.

While the emergency cash pot was acknowledged in its statement to Companies House, ScotRail raised further fears for the remainder of the franchise term, stating that expected cashflows have been “significantly impacted” as a result of the Covid-19 pandemic.

The firm said: “In response to the pandemic an emergency measures agreement was entered into with the Scottish Government, and while this insulates the company as as far as reasonable from the severe financial impacts of the pandemic, the expected cash flows across the remainder of the franchise term have been significantly impacted.

“As a result of government intervention telling people not to travel, there was a significant reduction in passengers travelling with Abellio ScotRail - up to 95% reduction on the prior year."

The Scottish Government is to take over the running of ScotRail in March 2022, Transport Secretary Michael Matheson announced to MSPs last month.

It follows a previous decision to terminate Abellio’s ten-year franchise as Scotland’s main train operator three years earlier than planned.

Mr Matheson said ScotRail would be run from then on by an arm’s length company owned and controlled by the Scottish Government, through an “operator of last resort”.

The news of Abellio ScotRail’s pre-tax losses comes as the company faces continuous threats of strike action over pay.

On Thursday, it was announced that hundreds of train ticket examiners had voted to strike over being paid less for working on days off than drivers.

All four ScotRail unions are also considering holding separate strike ballots over pay.

In a joint statement issued last week after the breakdown of pay talks, the unions claimed: “ScotRail has continually failed to engage in any productive way with the trade unions."

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