Virgin Trains intends to introduce a £5 fare for off-peak single journeys from London to Manchester in January 2009, in a move that would pressurise competitors to cut their fares sharply.

Virgin described the plans as “well advanced”, although only a minority of tickets – about 15 per cent on off-peak trains – would be priced between £5 and £20 each way. That amounts to about 45 seats per train.

The ticket would be less than half the price of the current cheapest single fare and will counter the perception that the cost of rail travel is soaring.

Fares are set to rise by more than inflation over the next five years.

Like other operators, Virgin is switching to a “yield management-style pricing model” for rail fares, imitating the budget airlines, which advertise tickets from just 99p a seat.

The company is implementing technology to allow passengers to find the cheapest available fares more easily, print their ticket at home or have an e-ticket sent to their mobile phone.

A Virgin spokesman said: “People who travel regularly on the railway know that you can get some very good deals, but we are still only hitting a minority of the people.”

The company, which operates trains on the West Coast Main Line from London through Manchester to Glas-gow, hopes to attract more passengers to the railway north of Manchester, where people prefer to travel by car.

A Department for Transport study last year found that people on higher incomes were twice as likely to use trains.

Only 40 per cent of those earning less than £13,500 made a train journey last year, against 77 per cent of those earning more than £31,200.

After years of difficulties, because of protracted engineering work to up-grade the West Coast Main Line, Virgin Trains is reaping the benefits of faster journey times and greater reliability between London and Manchester.

Timetable changes and the lengthening of Virgin’s 52 Pendolino trains will add 32 per cent more seating by 2012.

Virgin carries 20.5 million passengers a year, but will be able to carry 35 million after the improvements.

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