Virgin Rail Group Welcomes West Coast Franchise Extension Discussions

LONDON, May 19, 2011 - Virgin Rail Group (VRG) confirms that it is in discussions with the
Department for Transport (DfT) regarding an extension to the current West
Coast rail franchise agreement.

VRG is a joint venture between Virgin Group and Stagecoach and
operates the West Coast franchise through its Virgin Trains brand and the
franchise was due to expire in March 2012.

The discussions, which follow an approach from the DfT,
involve the terms of a franchise extension until early December 2012. VRG is
also in discussions with the DfT about its plans for new Pendolino carriages
that have been programmed to be available to go into passenger service by
December 2012.

As previously announced, VRG has pre-qualified to bid for the
new Intercity West Coast rail franchise. The Government confirmed today that
the new franchise will start on 9 December 2012 and run until 31 March 2026,
with an option to be extended by up to 20 months.

Virgin Rail Group Chief Executive Officer Tony Collins said: "We are
pleased to have been invited by the Government to discuss an extension to the
current West Coast franchise. This would mean we would continue to run
services for passengers for an additional eight months at an exciting and
challenging time for the country with the Olympic Games next year.

"We look forward to continuing our discussions with the Department for
Transport with a view to concluding a commercial agreement that will be in
the interests of passengers and deliver value for money to taxpayers."

Notes to Editors

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Virgin Trains is the brand name of Virgin Rail Group. We have operated
the West Coast passenger train franchise since 1997; discussions are
currently taking place with regard to the extension of the current franchise
through to 8 December 2012 and we have been invited to bid for the new
franchise.

Virgin Rail Group is owned 51 percent by Virgin Group and 49 percent by
Stagecoach.

Virgin Trains has been recognised in numerous industry awards. In 2010
the company has been named Best Rail Operator of the Year at the Travel Globe
Awards (voted for by readers of the Daily Mail, Mail on Sunday and Evening
Standard), and Best Rail Operator in the Group Leisure Awards (which we also
won in 2009).. In 2009 we were also voted Best UK Domestic Train Service by
Business Traveller magazine for the second year running. Virgin Trains first
achieved Investors In People accreditation in 2007and this was renewed in
2010; the IIP Gold award was achieved in 2011.

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