Deep dive · Rail · Accounts to March 2025

Inside the accounts · How does Avanti West Coast really make its money?

Avanti West Coast paid the Government a net £141m in 2024/25, almost 15 times its own £9.5m profit

First Trenitalia West Coast Rail Limited runs the intercity trains on the West Coast Main Line as Avanti West Coast, under a contract with the Department for Transport. Its accounts for the year to 31 March 2025 show £1,090m of passenger revenue, but the fares aren't where its profit comes from. The DfT carries almost all the revenue and cost risk and pays Avanti fees; in 2024/25 the money ran the other way, a net £141.1m back to the DfT. They also show what the trains and track cost, what 3,360 staff are paid, the dividends to its two owners and a contract that could end in 2026. Where a figure says something about how the railway is run, we explain it.

CompanyFirst Trenitalia West Coast Rail Limited · 10349442

AccountsAccounts to March 2025 PDF ↗

ByJames Sproule · 28 September 2026

Reading time8 min read

£1.09bnPassenger revenue, up 8.6%

£141.1mNet paid to the DfT, up from £21.9m

£14.7mOperating profit, a 1.4% margin on turnover

£11.5mDividends to the owners, more than the £9.5m profit

In 60 words

The answer

Avanti West Coast doesn't make its money from fares. Passengers paid £1,090m, but the Department for Transport carries "substantially all revenue and cost risk". Avanti earns a fixed management fee and a performance fee, netted against a premium it pays the DfT: a net £141.1m went back in 2024/25. Avanti kept £14.7m of operating profit, £1.44 in every £100 of turnover.

How it is paid

A contract, not a franchise

The company "operates the West Coast Partnership rail contract", a venture between FirstGroup and Trenitalia UK. It has two parts: Avanti West Coast, which runs today's intercity trains from London Euston to Birmingham, Manchester, Liverpool, North Wales and Glasgow, and West Coast Partnership Development, the "shadow operator" advising on HS2 (pp. 2 and 3).

The contract: nine years on paper, three for certainThe Government plans to bring every DfT-contracted operator into public ownership by October 2027 (p5).

202120222023202420252026202720282029203020312032

Emergency measures (ERMA)

From Sep 2020

National Rail Contract

15 Oct 2023 to Oct 2032

Core term

To 18 Oct 2026

These accounts

2024/25

DfT can end it on 12 weeks' notice

After 18 Oct 2026

Strategic report, pp2 and 5; note 1(c), pp26–28.

The risk

The DfT takes it

"Under the NRC the DfT retains substantially all revenue and cost risk" (p. 3). Before October 2023, under emergency measures, "the DfT took revenue and cost risk".

National Rail Contract from 15 Oct 2023

The fee

Fixed plus variable

"There is a fixed management fee and the opportunity to earn an additional variable fee", set by punctuality and other targets (p. 3).

Amounts not disclosed

The flow

A premium back

The company "has continued to be in a premium paying position with the DfT. It returned a net payment to the DfT of £141.1m" (p. 2).

£141.1m, up from £21.9m

The catch

Costs can be disallowed

Avanti's cost risk is limited to costs the DfT refuses, for example spending over budget, or not "in line with being a good and efficient operator" (p. 26).

Directors expect the fees to cover it

What this means for the railwayUnder this kind of contract, a good year for fares and a bad year for fares look much the same in Avanti's profit. The directors say so in their risk section: competition from cars and video calls could cost passenger revenue, but "this passenger revenue risk ... is substantially mitigated under the NRC arrangements by the DfT" (p. 9). What moves Avanti's own result is the performance fee, and costs the DfT won't pay.

The profit and loss account

The railway on one page

Turnover of £1,015.6m is fares, plus other revenue, less the net payment to the DfT. Operating costs were £1,002.9m. What was left, with £2.0m of grant income, was £14.7m of operating profit (pp. 23 and 34).

From £1,090m of fares to £14.7m of operating profit, 2024/25The net payment to the DfT is the premium less the management and performance fees; the accounts don't split it.

Totals
Costs and charges
Income and credits

Note 2, p34; profit and loss account, p23; note 3, p34.

For every £100 of turnover, Avanti kept £1.44Per £100 of turnover. Costs took £98.76 and grant income added £0.20.

Other external chargesincluding trains and track access£72.52

Staff costs3,360 people on average£22.64

Materials and consumables£3.40

Depreciationit owns few assets£0.20

Kept as operating profitafter £0.20 of grant income£1.44

Profit and loss account, p23; note 3, p34. Our split.

£14.7m

operating profit, up from £11.4m. Turnover fell £3.8m, but operating costs fell £9.9m (p. 23).

£9.5m

profit after tax. Interest cost £2.0m, the pre-contract interest handed back to the DfT, and tax at 25% took £3.1m (pp. 23, 38 and 39).

What this means for the railwayA 1.4% margin on a billion pounds is what a fee-based contract looks like: the operator runs a large business on the DfT's behalf and is paid a small amount for doing so. Even interest isn't Avanti's to keep: "Under the NRC, interest earned by the company is returned to the DfT and increases the overall level of premium payment" (p. 38). That was £1.8m this year.

The finding

£1,090m of fares, and £141m back to the Government

Fares are bigger than turnover. Note 2 splits turnover three ways: passenger revenue of £1,090.1m, a "net contract/franchise payment" of minus £141.1m, and other revenue of £66.6m (p. 34). Passenger revenue rose 8.6%; turnover fell 0.4%.

The fees are inside the payment. "The net contract/franchise payment includes management and performance fee income net of contract/franchise premium payments" (p. 34). So the £141.1m is what's left after the DfT's fees to Avanti are taken off what Avanti owes it. The accounts don't give either half.

Other revenue nearly doubled, from £37.4m to £66.6m. It covers catering, car parks, commission on ticket sales, station facilities for other operators and sundry income (p. 34). The note doesn't say what drove the rise.

Paid to the DfT: £141m, against £9.5m of profitThe net payment rose more than sixfold. Dividends were more than the year's profit.

Net paid to the DfT
Profit after tax
Dividends paid

Note 2, p34; profit and loss account, p23; statement of changes in equity, p25.

£12.94

of every £100 of passenger revenue went back to the DfT as the net payment (our arithmetic from p. 34).

6.5×

The net payment was six and a half times the year before: £141.1m against £21.9m (p. 2).

Rail Settlement Plan

Fares are shared between operators "predominantly based on models of route usage, by the Railway Settlement Plan" (p. 30), not by who sold the ticket.

What this means for the railwayThe West Coast Main Line takes in more than it costs to run, so the flow of money goes to the Government rather than from it. The accounts treat the fares as Avanti's revenue, but with the DfT holding the revenue risk, the growth in fares showed up mostly as a bigger premium, not a bigger profit. The Revenue Outturn Mechanism, which let Avanti earn extra fee for growing revenue, ended on 31 March 2025 (p. 33).

Not disclosed. The size of the fixed management fee, the performance fee earned, the premium before fees, passenger numbers, journeys or average fares. The strategic report doesn't explain why the net payment rose from £21.9m to £141.1m.

Costs

What the trains and track cost

£736.5m in one line. "Other external charges" are 73% of operating costs. "Significant costs within other external charges include rolling stock costs and track access costs" (p. 34), but the note gives no amounts for either, or for electricity or diesel.

Leases give a clue. Operating lease rentals were £268.1m: £146.2m for plant and machinery and £121.8m of "other operating leases", down from £145.8m (p. 38). The note doesn't say which covers the trains.

The trains aren't Avanti's. The company owns just £13.5m of tangible assets (p. 24). Its £117m Pendolino refurbishment was "financed by the fleet owners Angel Trains", and its £350m project to replace the diesel Voyagers with 23 new Hitachi trains continued: the last Voyager left passenger service in December 2024 (p. 3).

Where £1,003m of operating costs went, 2024/25The accounts say other external charges include rolling stock and track access costs, but give no amounts.

Other external chargesnot broken down£736.5m

of which: operating lease rentalsplant and machinery £146.2m, other £121.8m£268.1m

Staff costswages, NI and pensions£229.9m

Materials and consumables£34.5m

Depreciation and amortisation£2.0m

Note 3, p34; note 9, p38.

£572m of lease commitments, none beyond five yearsMinimum payments under non-cancellable operating leases. Trains and track access are one figure.

March 2024
March 2025

Rolling stock and track access: next year£247.2m

Rolling stock and track access: years 2 to 5£276.9m

Land and buildings: next year£23.9m

Land and buildings: years 2 to 5£24.4m

Note 21, p44.

What this means for the railwayAn operator like Avanti leases its trains and pays to use the track, so a large part of its costs is committed in advance. The commitments note shows £247.2m due in the next year for rolling stock and track access, £524.1m over five years, and nothing beyond that (p. 44).

Background, not from the accountsTrack access charges are paid to Network Rail, which owns and maintains the track and most large stations. The accounts name Network Rail as a partner (pp. 2 and 7) but not as the recipient of any payment.

Not disclosed. Separate figures for track access charges, rolling-stock leases, traction electricity and diesel, or who owns and finances the new Hitachi trains. The £350m cost is given, but not how it's paid for.

Staff and pay

3,360 people and £229.9m of pay

3,360 people on average, four in five in operationsAverage periodic number, including directors, up 1.9%. Staff cost £68,400 a head, up 7.2% (our arithmetic).

79%21%

Operations · 79%
Management and administration · 21%

Note 5, p35.

Who the 3,360 people areAverage employees in 2024/25. Each square is 1%.

Operations: 2,643
Management and administration: 717

Note 5, p35.

The second-biggest cost. Staff costs rose 9.3% to £229.9m: £196.6m of wages, £21.8m of National Insurance and £11.6m of pensions (p. 35). The average headcount rose 1.9%, to 3,360.

£68,400 a head. That's staff cost per average employee, up 7.2% from £63,800; wages alone were £58,500 a head (our arithmetic from p. 35). The directors warn that "labour costs represent a significant component of the company's operating costs" (p. 10).

Drivers. The company is running "unprecedented levels of driver recruitment and training" (p. 3). Female trainee drivers are up nearly 60% since 2023, and a third of new trainee drivers are women (p. 13).

Strikes

"The company has continued to experience industrial action during the financial year. Industrial action presents enormous challenges for everyone, and most importantly for rail passengers" (p. 4).

£919,000

paid to four directors, plus £84,000 of pension contributions. The highest-paid received £269,000, down from £387,000 (p. 36).

Five paid elsewhere

Five directors are paid by FirstGroup, First Rail Holdings or Trenitalia UK, and "have not performed any qualifying services on behalf of the company" (p. 36).

What this means for the railwayBecause the DfT carries cost risk, a pay rise doesn't come straight out of Avanti's profit, as long as it is in the budget the DfT agrees. That is why the directors' labour-cost risk is framed around service and recruitment as much as money: industrial action "could adversely impact customer service and have a financial impact" (p. 10).

Not disclosed. The number of strike days, their cost, or any pay settlement. The accounts don't split staff by grade beyond operations and management, or give drivers' pay.

Punctuality and the fee

Paid on performance

66.2%

Public performance measure

Down from 69.1%. "Given the level of train service performance there has been a strong focus on putting robust plans in place to improve services" (p. 7).

5 KPIs

The scorecard

The performance fee is set by scorecards agreed with the DfT each year, "centred around five operational performance KPIs and the service quality regime" for trains, stations and customer service (p. 33).

Estimated

Scores not final

"Where the DfT has yet to complete its assessment of scores, fees are recognised based on a management view of scorecard performance. Fees are paid after the DfT has completed its assessment" (p. 33).

What this means for the railwayThe directors call the DfT's performance scores "an important KPI for the company as the scores determine the performance fee income received" (p. 7). Punctuality fell in 2024/25, yet operating profit rose. The accounts don't show whether the performance fee went up or down, so that can't be tied to the scores.

Background, not from the accountsFor long-distance operators, the public performance measure counts a train as on time if it reaches its final destination within ten minutes of the timetable.

Not disclosed. The performance fee earned or the scores achieved, cancellations, delay compensation paid to passengers, and any penalties or disallowed costs. The contract risk section says a breach could bring "penalties including the potential termination of the rail contract" (p. 8), but no penalty is reported.

Ownership

FirstGroup, Trenitalia and the dividend

70 : 30

Two owners

First Rail Holdings holds 70 A shares and Trenitalia UK 30 B shares, ranking equally for profits (p. 43). FirstGroup plc is the ultimate parent; Trenitalia UK is owned through Trenitalia by Ferrovie dello Stato Italiane (p. 49).

£11.5m

Dividends

Up from £8.1m, and more than the year's £9.5m profit, so net assets fell to £8.9m (pp. 16 and 25). On equal share rights that would be about £8.0m to FirstGroup and £3.4m to Trenitalia (our arithmetic).

£45m

Standby support

A 70:30 subordinated loan facility for the Secretary of State, undrawn, plus facilities of up to £6m and £8m. A £10m performance bond expired in the year (p. 44).

What this means for the railwayThe owners' money at risk is small beside the business: £100 of share capital, £8.9m of net assets and standby facilities, against a billion pounds of revenue. What they take out is the fee margin, paid as dividends. Trenitalia UK also sold the company £3.7m of services, mainly management, staff secondments and ticket retailing systems (p. 49).

Not disclosed. What FirstGroup charges the company; its related-party transactions are exempt from disclosure (p. 26). The accounts don't say how the dividend was split between the two owners.

Railways Pension Scheme

A pension surplus that belongs to the contract

A shared-cost scheme. Staff are in the West Coast Partnership Section of the Railways Pension Scheme, where "costs are formally shared 60% employer and 40% employee" (p. 32). For Category 60 members the employer pays 12.84% of pay and the member 8.56% (p. 45).

The section is in surplus. Assets were £966.1m and liabilities £803.5m: a £162.6m surplus, up from £34.8m, as a higher discount rate, 5.87% against 4.89%, cut the liabilities (our arithmetic from pp. 46 and 48).

None of it shows. Members' 40% share and a "contract/franchise adjustment" cancel it, so the balance sheet shows nil (pp. 24 and 48). The £139.5m actuarial gain in the year was cancelled the same way (p. 23).

A £163m pension surplus, and none of it is Avanti'sRailways Pension Scheme, West Coast Partnership Section, at 31 March 2025.

Scheme assetsRailpen pooled funds£966.1m

Scheme liabilitiesbenefits built up so far£803.5m

Surplusour arithmetic£162.6m

Members' 40% shareshared-cost scheme£65.0m

Contract adjustmentpasses to the next operator£97.5m

On Avanti's balance sheetnil£0.0m

Note 23, pp45–48.

What this means for the railwayThe pension risk stays with the railway, not the operator: "at the end of the contract/franchise, any deficit or surplus in the scheme section passes to the subsequent operator with no compensating payments" (p. 45). As the directors put it, "the company is not responsible for any residual deficit at the end of a contract so there is only short-term cash flow risk" (p. 9). Avanti pays the contributions while it holds the contract, £12.2m this year, and that's all.

In the directors' words

The risks they name

In the event that the contract was terminated, it is anticipated that the trading operations would cease and certain assets and liabilities would be transferred from the company at book value.
Material uncertainty as to going concern, p. 28

The Government has stated that they expect all DfT-contracted passenger train operators to be in the public sector by October 2027.
Going concern, p. 5

If it fails to comply with these conditions, it may be liable to penalties including the potential termination of the rail contract.
Principal risks, p. 8

In plain termsThe contract runs to 2032 on paper, but the Passenger Railway Services (Public Ownership) Act 2024 lets the Government take it back once the core term ends on 18 October 2026, with twelve weeks' notice (p. 5). The directors and the auditors, PwC, both flag a material uncertainty over the company's future as a going concern; the audit opinion itself isn't modified (pp. 19 and 28). Other risks named include IT and cyber attacks, fuel and electricity prices, bad weather and terrorism (pp. 8 to 10).

Not disclosed. A transfer date for Avanti. The accounts don't say which assets and liabilities would move to a new operator, or what the owners would receive when the contract ends.

Two years side by side

Year on year

2024/25 against 2023/24Percentage change, one scale. The net payment to the DfT, up from £21.9m to £141.1m (+546%), is left off so the rest can be read.

Passenger revenue£1,003.8m → £1,090.1m+9%

Other revenue£37.4m → £66.6m+78%

Turnover£1,019.4m → £1,015.6m-0%

Other external charges£760.6m → £736.5m-3%

Staff costs£210.3m → £229.9m+9%

Average employees3,296 → 3,360+2%

Staff cost per head£63.8k → £68.4k+7%

Operating profit£11.4m → £14.7m+28%

Dividends£8.1m → £11.5m+42%

Cash at year end£75.7m → £46.8m-38%

Profit and loss account p23, balance sheet p24, notes 2, 3 and 5, pp34–35, equity p25.

Show the figures as a table

Measure	2024/25	2023/24
Passenger revenue	£1,090.1m	£1,003.8m
Net contract payment to the DfT	−£141.1m	−£21.9m
Other revenue	£66.6m	£37.4m
Turnover	£1,015.6m	£1,019.4m
Other external charges	£736.5m	£760.6m
Staff costs	£229.9m	£210.3m
Operating lease rentals	£268.1m	£292.2m
Operating profit	£14.7m	£11.4m
Profit before tax	£12.6m	£12.3m
Profit after tax	£9.5m	£9.4m
Dividends paid	£11.5m	£8.1m
Average employees	3,360	3,296
Public performance measure	66.2%	69.1%
Cash at year end	£46.8m	£75.7m
Net assets	£8.9m	£10.8m
Pension section surplus (our arithmetic)	£162.6m	£34.8m

2023/24 was split between the emergency measures agreement, to 14 October 2023, and the National Rail Contract from 15 October 2023.

Quick answers

Questions about Avanti West Coast

How does Avanti West Coast really make its money?

Does Avanti West Coast keep the money from ticket sales?

Not in the usual sense. Its accounts record £1,090.1m of passenger revenue in the year to March 2025, but under the National Rail Contract the Department for Transport 'retains substantially all revenue and cost risk'. Avanti earns a fixed management fee and a performance-based fee, which are netted against a premium it pays the DfT. In 2024/25 that left a net payment of £141.1m to the DfT, up from £21.9m.

How much profit does Avanti West Coast make?

£14.7m of operating profit and £9.5m after tax in the year to March 2025, on turnover of £1,015.6m: a margin of about 1.4%. It paid £11.5m of dividends to its owners, more than the year's profit.

Who owns Avanti West Coast?

The operator is First Trenitalia West Coast Rail Limited. First Rail Holdings Limited, part of FirstGroup plc, owns 70% and Trenitalia UK Limited, part of Italy's Ferrovie dello Stato Italiane, owns 30%. FirstGroup plc is the ultimate parent.

When does Avanti West Coast's contract end?

The National Rail Contract started on 15 October 2023 and runs to October 2032, with a core term to 18 October 2026. After that the DfT can end it on twelve weeks' notice, and the Government expects all DfT-contracted operators to be in public ownership by October 2027. The directors and auditors flag this as a material uncertainty over the company's going concern.

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