FirstGroup is bidding to run competing trains on the east coast mainline, barely a week after its rival Virgin Trains started operating the franchise on that route.
First has submitted plans to the rail regulator for a low-fare, open-access service, which it claims would compete with the budget airline market between London, Newcastle and Edinburgh – although Stagecoach, which operates Virgin Trains East Coast, said First’s plans were “not compatible” with its own.
The five trains a day in each direction would make additional stops at Stevenage, which is close to two London airports, and Morpeth, which is near Newcastle airport – and have just economy-class travel.
First, which lost out to the 90% Stagecoach-owned Virgin Trains joint-venture to run the east coast franchise, hopes the Office of Rail Regulation (ORR) will approve its plans by May for a 2018 start.
Leo Goodwin, First’s commercial development director, said: “We’ve identified that there is a very specific niche market between London and Edinburgh, contested particularly by budget airlines. At the heart of our product proposition is a single class of travel: by serving a very simple network, with a simplified business and an efficient train, our business model is based on fares that are significantly lower than those on offer today across the travel options, including air.”
FirstGroup operates another similar open-access service on the route, Hull Trains, which has consistently been rated highly in passenger surveys.
Open-access plans need to demonstrate to the regulator that they will expand the overall rail market. First said it would introduce new intercity trains.
Tim O’Toole, First Group’s chief executive, said: “Open-access operators can really add value and create passenger loyalty by serving niche markets. We have put our compelling case to the ORR and we are looking forward to hearing the outcome of our application.”
A spokesman for the Stagecoach-Virgin consortium said its franchise programme already included plans to cut journey times between London and Edinburgh to four hours.
“While limited open-access competition is possible, we don’t believe what has been proposed would be compatible with our timetable proposals, which will deliver extra and new direct services to London from key locations in Scotland and England and more weekend services,” he said.
He added that its winning franchise bid had taken account of potential new open-access operations, and dismissed First’s proposals as “a scaled-down version of similar plans already published by another open-access operator”.
He said Virgin Trains’ contract would protect it against most revenue loss incurred.
