<div><strong>Q.WHY IS THE EAST COAST RAIL LINE STRUGGLING?</strong><br /><strong>A.</strong>The franchise &ndash; along with other train operators &ndash; is struggling as the downturn results in both leisure and business travellers cutting back on travel. It is also losing out on its premium passengers, as those who are still travelling stay away from first class travel. Rising fuel has also been a problem for National Express as it struggles to pay for the line.&nbsp;<br /><br />But the biggest strain on National Express with regards to the east coast line is the &pound;1.4bn it agreed to pay the government for the seven years to 2015.</div>
<div><br />National Express is not the first firm to fall into difficulties running the line. Its predecessor, GNER, was stripped of the franchise after its parent company, Sea Containers, fell into financial difficulty.&nbsp;<br /><br /><strong>Q.HOW HAVE NATIONAL EXPRESS GOT AWAY WITH LOSING SO LITTLE?</strong></div>
<div><strong>A.</strong>As the franchise is run by a special purpose vehicle, NXEC, the parent company is not exposed to huge liabilities. National Express made loans of &pound;40m to NXEC and is also liable for a bond of up to &pound;32m&nbsp;to be paid upon default.<br /><br /><strong>Q.WHAT NEXT FOR THE EAST COAST LINE?</strong></div>
<div><strong>A.</strong>The government has said it is eager to put the franchise up for sale next year.&nbsp;National Express is the second train line to fail at running it.&nbsp;The Conservatives have attacked the franchising system, saying it pushes train operators to make over-optimistic promises in their bids.<br /><br />The franchise is still run by National Express&nbsp;until the government steps in. The government has said that its state-ownership won&rsquo;t affect passengers or staff and that most services will stay the same.</div>