Posted 10th March 2015 | 8 Comments

FirstGroup lays down gauntlet on East Coast

VIRGIN TRAINS East Coast faces a new challenge from a defeated rival less than two weeks after the reprivatised franchise was launched.

The challenger is FirstGroup, which was one of the shortlisted contenders for the controversial contract.

Now the transport group has revealed that it has submitted a formal track access application to the Office of Rail Regulation, which involves 'several' open access trains a day between London and Edinburgh. There would be intermediate stops, but only at Stevenage, Newcastle and Morpeth.

First said it intends to compete with aviation, and does not mention the new East Coast intercity franchise, which was launched on 1 March. First explained: "The service is designed specifically to encourage travellers to switch from air to rail as currently two thirds of journeys between the two capitals are made by plane.

"Passengers would benefit from low fares, free Wi-Fi and onboard catering, all offered in one high-quality class of travel on brand new, state of the art rolling stock comparable to other trains being introduced on the route. If successful with the application it is planned that the new services will be introduced from 2018."

Although the official target is domestic airlines, FirstGroup's ambitions will also be potential competition for Virgin Trains East Coast, 90 per cent of which is owned by Stagecoach and the rest by Virgin Trains.

First added: "FirstGroup will introduce fares that are highly competitive with budget air carriers and persuade many passengers to and from London to make the greener switch to rail. Stevenage station in the South East is close to Luton and Stansted airports, and Morpeth station is close to Newcastle airport, and serving these stations will help potential air travellers consider rail as an option."

First already has the majority share of an East Coast open access operator, First Hull Trains, which launched a new daily return service to London from Beverley in North Yorkshire last month.

First chief executive Tim O'Toole added: "These innovative plans will give customers travelling between London, the North East of England and Edinburgh an attractive alternative to flying. We hope to entice passengers away from budget airlines through our low fares and high-quality trains. Open access operators can really add value and create passenger loyalty by serving niche markets. Our current company First Hull Trains remains an exceptional example of how passengers can benefit from this type of operation. We have put our compelling case to the ORR and we are looking forward to hearing the outcome of our application.”

Meanwhile, a spokesman for the Stagecoach/Virgin consortium warned that if a competing open access service was given key paths, taxpayers might become liable for any resulting revenue losses.

The spokesman explained: “Our bid took account of the potential for new open access operations. Indeed, FirstGroup’s proposals are a scaled down version of similar plans already published by another open access operator. The franchise agreement we have with the Department for Transport includes contractual protection for the majority of any revenue shortfall should we not secure the track access to deliver our own timetable.

“While limited open access competition is possible, we don’t believe what has been proposed would be compatible with our timetable proposals."

The Office of Rail Regulation will now consider the proposals with the aid of an industry consultation over the next few weeks.

Reader Comments:

Views expressed in submitted comments are that of the author, and not necessarily shared by Railnews.

  • Roshan, Leeds

    Some interesting comments and debate on this comments section. I believe open-access is the way forward, and I think the entire franchising model itself is deeply flawed. Open-access is almost a return to the days before the "Big Four", where investment due to private capital and fierce competition between companies led to a fantastic railway system. Open-access companies are proven to provide better value for money and better customer service, whilst boosting competition and thereby reducing the fares and improving service from rival companies. If the DfT are not going to give the go-ahead to the GNER plans from Alliance Rail then I really hope they approve this.

  • James Pritchard, Southampton

    This discussion has thrown up some interesting issues when it comes to the way in which we make comparisons between rail and air, and the way in which we value (or don't value) certain aspects.

    Steven, you may be right when you say that Gatwick - Victoria is less than 35 minutes, but when you include getting off the plane, possibly collecting luggage, getting to the rail platform (in the South Terminal) and waiting for a train, my suggestion that one needs to add an hour from landing until getting in to central London may actually be quite optimistic. I do find it strange that we have a tendency to compare journey times on the basis of "station to station" or "push-back to on-stand" when there is actually a lot more to consider.

    My personal experience of travelling with luggage on an FGW HST has actually been pretty good, if I am honest. Ironically, it's been much worse on Southern trains, which I might have to use if I'd flown in to Gatwick with a bag. If one is flying with luggage, there is admittedly a freedom knowing that once a bag has been checked-in there is no need to carry it or keep an eye on it, but a) carrying it through the airports and on to a connections is as much of a faff as travelling by train and b) packing a bag for a flight can be much more restrictive than packing one for a train.

    The great thing about First Group's proposal is that it is in addition to the franchised rail services on the ECML. Either they will make it work, by providing a more attractive proposition than budget airlines or coach travel, or they won't. Either way, Virgin will still be there offering their level of customer service and First Class options for those who want to pay for it.

  • Steven Antonio, Cornwall

    James, you get to the point in your second paragraph. I haven't ever experienced LGW to VIC taking more then 35 mins, except for delays. Sure, you can carry large bags on trains but have you tried recently? Its a miserable experience. First run what I would describe as a 'minimal' service, which makes excellent business sense but as a result I am hard-pressed to find a comfortable space on any train I have taken recently. The seats are, by First's own classification 'airline' style, most of the smaller trains are 150/155 cobellations, which are okay.

    No comparison of the route I chose is ever going to be perfectly 'fair' - try getting to Newquay airport! - I am lucky to get a lift - but your point about advance rail fares is one which needs addressing, as I say, First have it all their own way at the moment.

  • david c smith, milton keynes

    Y es, I feel Tim is right. For some time, I've thought those services where competition is feasible, on East Coest and for Intercity / lomg distance in general, franchising is the wrong model and open - access is what is needed. Why bother to privatise and then end up with private monopolies that need heavy regulatory control ( knocking on the head any potential benefits from innovation and enterprise ) ? Internal aviation and intercity roadcoaches aren't subject to franchising.

    Of course, operations that have natural captive markets ( such as most commuter ) need a different approach -perhapr involving local direct democratic control ?

  • James Pritchard, Soton

    Steven, you're not necessarily making fair comparisons. You consider rail fares five days in advance, but you take an average of your air fares, booked at an unspecified time in advance. Looking today at Flybe's website for travel in five days time (Monday), I would pay a minimum of £114 return - possibly more depending on the time I wanted to go and on whether I needed to take a large bag (for which there is no charge on a train).

    Of course, to be fair, flexible rail tickets have a fixed price whether you buy them five days in advance or five weeks in advance, whereas air fares fluctuate much more. Although - theoretically - one should be able to get cheap Advance rail fares, I have found availability on this route to be non-existent (as an aside, I'd be interested to know what First Group have to say for themselves about that).

    The other issue is "last mile". Assuming that there is a drive to either the station or the airport in Cornwall, I shall only consider the London end of the journey here. If you were heading to South London or Sussex then flying may make sense. If you are heading to central London, you need to add another £15 for a rail fare from Gatwick, and take in to account the fact that it will take at least an hour from landing to arriving in Victoria.

  • Steven Antonio, Cornwall

    So....First want to 'compete with aviation' eh?
    How about showing us what you're capable of on one of the routes you already have a monopoly on, namely Cornwall (Newquay or Penzance) to London. On the train? 101 quid return, 5 hours each way. Both prices quotes 5 days in advance of the journey.
    On the plane? NQY-LGW 50 mins, average price I have paid over the last twelve months 90 quid return plus 5 quid to use Newquay airport.
    Which is it to be? Long and cheap or short and expensive? Because one things for sure, First are getting away with murder having it all their way as it is now.

  • Tim, Devon

    The whole of the east coast network should be made open acces, no need for franchising.

  • Steve Alston, Crewe

    Surely after the previous application (Platinum Trains, 2008) for an additional open access operator was rejected by the DfT, this will have to be automatically rejected for the same grounds - the principle that it would interfere with the available paths on the ECML.

    There have been no substantial infrastructure changes since that decision, and there has been no reduction in paths currently being occupied by existing operators - VTEC/GC/HT, therefore DfT should reject this on the exact same principle.