First win Intercity West Coast franchise

[HH]

Forgive me but could you provide a link, I'm struggling to find it.

http://otp.investis.com/clients/uk/stagecoach/rns/regulatory-story.aspx?cid=273&newsid=260463

Not on their website, on their advisor's.
--- old post above --- --- new post below ---

Thanks, interestingly says they would have targeted £45m of savings a year principally from the supply chain and Alstom (presumably efficency improvements in its trains). Since its a market release the information is purely financial though and it doesnt say what they would have done in Firsts place.

Agreed. There've been bits and pieces all around though. They had similar plans for Blackpool & Shrewsbury (as did at least one other bidder). I'm pretty sure they would have put in 6 car Pendos, but what number? Otherwise I'm guessing that we would have seen less change than with First. That's the nature of incumbent bids.

 

[WatcherZero]

The Scotsman has done a pretty critical piece on Firsts bid, noting that they assume 10.4% revenue growth per year, but that in the last ten years despite the huge investment in the West Coast the average has been 10.2% and that its unlikely to see that same rate going forward without similar major investment.

 

[HH]

The Scotsman has done a pretty critical piece on Firsts bid, noting that they assume 10.4% revenue growth per year, but that in the last ten years despite the huge investment in the West Coast the average has been 10.2% and that its unlikely to see that same rate going forward without similar major investment.

Absolutely. 10.4% looks very optimistic, not just because there was a step change in the last ten years that won't be repeated, but also because the economic outlook is quite different today than in 2002. Since the bids were submitted the ONS has downgraded its 2013 forecast by 1%. That equates to nearly £9m a year and growing on ICWC.

It's also the case that First could have bid much less and still won the Franchise. However realistic you think their numbers are, that has to hurt.

 

[ainsworth74]

Not on their website, on their advisor's.

Many thanks

 

[SF-02]

I assume this means First will lose Great Western. Hope that's not the end of Travelling Chef & Pullman Restaurants.
Seems to me like it's mostly change for changes sake - and at huge cost in rebranding etc.

Yep and after Virgin spent 60m on franchise bids in recent years. What a waste. First will probably lose Great Western and all the hard work after such a poor start will be wasted. Back to square one. First really got on top of the problems and fought for, and understood, the need for growth around Bristol and the South West and backed the 10 year battle for the small amount of cash needed for improvements. Now I fear it's all back to the start and the knowledge and understanding gained by some dedicated people at First will go. Looking likely that Arriva or NE will turn up and merge maintainance with Cardiff leading back to the shambles of 2006? I really hope not. I hear people saying bids are blind but really? History doesn't support that does it?

 

[junglejames]

Yep and after Virgin spent 60m on franchise bids in recent years. What a waste. First will probably lose Great Western and all the hard work after such a poor start will be wasted. Back to square one. First really got on top of the problems and fought for, and understood, the need for growth around Bristol and the South West and backed the 10 year battle for the small amount of cash needed for improvements. Now I fear it's all back to the start and the knowledge and understanding gained by some dedicated people at First will go. Looking likely that Arriva or NE will turn up and merge maintainance with Cardiff leading back to the shambles of 2006? I really hope not. I hear people saying bids are blind but really? History doesn't support that does it?

Why are First going to lose GW? Winning the WCML has no bearing on other franchises. None whatsoever. This has been pointed out many times. If there was a problem, they wouldnt be allowed to bit, but seemingly they are going to bid. If First put the best bid in for GW, then they will no doubt win it.

 

[SF-02]

Why are First going to lose GW? Winning the WCML has no bearing on other franchises. None whatsoever. This has been pointed out many times. If there was a problem, they wouldnt be allowed to bit, but seemingly they are going to bid. If First put the best bid in for GW, then they will no doubt win it.

The DfT have never looked favourable on one company owning too many big franchises whether a company makes the shortlist or not. It's risky, and if First do fail on west coast it would put other franchises in jeopardy too. Better to avoid such sticky situations. And it's unlikely First will go all out on West Coast now they are over-extending themselves (according to many) on west coast. Another high premium bid could kill the share price so they'd be tempted to go conservative. Good reason for the DfT to pick one of the others even if their plans could be terrible for the franchise.

 

[WatcherZero]

At Dec 2012 first will own 29% of the entire UK rail market.

 

[Class377/5]

At Dec 2012 first will own 29% of the entire UK rail market.

I think you'll find that run not own unless they've starting buying the track now.

 

[bnm]

At Dec 2012 first will own 29% of the entire UK rail market.

What does that figure mean? 29% of the franchised passenger services? 29% of the turnover of UK passenger rail franchises? 29% of the total turnover of the UK rail market inclusive of freight, OAO and railtour? 29% of the total annual passenger mileage?

It's a rather baseless figure without context.

 

[HH]

At Dec 2012 first will own 29% of the entire UK rail market.

And by Dec 2014 they could run only West Coast. Unlikely, but they almost certainly won't retain all their franchises.

 

[PR1Berske]

Steve Bell has his say

 

[87015]

And by Dec 2014 they could run only West Coast. Unlikely, but they almost certainly won't retain all their franchises.

Be very interesting to see if they continue the aggressive bid strategy for GW knowing they now have WC.

 

[ole man]

There are Virgin staff at Crewe and Birmingham that are really concerned about there future,have first said anything about getting rid of staff?.

 

[Zoe]

I have not seen any evidence of any policy preventing a company from holding more than one large franchise any more than I have seen reference to a policy preventing the same company holding the East and West coast franchises at the same time which is frequently suggested on here. I did actually read once that there would only be concerns if one company held more than 40% of the market can't find reference to that at this time.

 

[Ascot]

Seen at the BHM lounge this morning. Apologies for the shadow.


Sent from my iPhone using Tapatalk

 

[NSEFAN]

Ascot, if that letter isn't brown nosing then I don't know what is!

 

[jopsuk]

the way Virgin phrase their statements (letter, video etc) to staff, it half-implies the staff are on the scrapheap too. Which is simply not the case of course.

 

[marks87]

the way Virgin phrase their statements (letter, video etc) to staff, it half-implies the staff are on the scrapheap too. Which is simply not the case of course.

They're on the Virgin scrapheap.

In some ways, it is a bit like losing your job and getting a new one with a new employer, even if it is doing exactly the same thing.

 

[krisk]

Be still my beating heart :roll:

That made me chuckle

 

[LNW-GW Joint]

In the case of Wrexham/Lockerbie, is that situation to change in the new franchise or are both stations still in a politically driven limbo?

No change, just more stations added to the list.
I wouldn't say it's politically driven.
There is local demand, DfT are sceptical, First are giving them a punt.
I should think Blackpool will be safe long-term, as it was only lack of stock which prevented VT from staying on.
Electrification changes things (not something Shrewsbury/Wrexham can expect soon).

 

[The Planner]

Mr Branston Pickle is suggesting that they were going to add new routes and change ticketing and add loyalty schemes much like First have said they will, but what was stopping Virgin implementing some of these ideas prior to the bid ? Yes, he couldnt get the baby Pendos and run to Shrewsbury etc now, but what else in their bid could have been implemented prior to refranchising that would have given them extra brownie points ?? Why say "look what we are going to do" when there was some potential to say "look what we are doing now, let us keep it" ?

 

[PR1Berske]

This is from the Lancashire Evening Post so forgive its Preston bias:

The boss of a rail firm which will take over the running of Preston Station has claimed more jobs will be created with extra services into the city.

FirstGroup has won the 13-year £5.5bn franchise to run the West Coast Mainline which had been operated by Virgin Trains since 1997. The company has promised to create a new first class waiting room at Preston’s train station.

However, union bosses have expressed fears of jobs cuts while rail campaigners have claimed on-board services could be scaled-back.

But in an interview with the Evening Post Vernon Barker managing director for FirstGroup’s rail division claimed Preston’s 451-strong workforce would not be reduced when it takes over on December 9.

He said: “We do not get to meet with them until December 9 but the message is we are very keen to take people currently employed in Preston, and have them transferred to us on December 9.

“We have a history of investing in staff quite contrary to anything you have read in the media.”

Asked whether he intended to expand the workforce, he replied: “I think it is one of the things we are quite keen to do.”

FirstGroup will initially run the timetable it inherited from Virgin Trains but claimed it will introduce a late service from London to Glasgow, stopping at Preston and more frequent services from London to Preston.

It will also introduce a direct London Euston to Blackpool service, as well as thousands of extra seats on the line.

Campaign groups have raised fears on-board services will be cut and ‘front-facing customer services staff’ will be reduced.

But Mr Barker who was previously responsible for the First TransPennine Express line, claimed such services would not be reduced.

He said: “It could not be further from the truth.

“We will need colleagues to be able to deliver this.

“Our plans are not for taking catering off, we will be taking catering services throughout the trains and we will need more customer-facing staff for our service proposals.”

Virgin Trains had announced it would carry out a major upgrade of Preston Station if it retained the franchise.

But FirstGroup has confirmed only minor alterations will be made in the short-term.

Mr Barker said: “It is a busy station and it does need to have an enhanced customer experience.

“We are talking about refurbishing a waiting room (to create first-class waiting room) but unfortunately on and around the station in terms of grand plans we need to wait until we get into the franchise at the end of the year and get to grips with it.”

Virgin Trains took over the franchise in March 1997 and has claimed a number of successes in the last 15 years.

It has seen passenger numbers more than double from 13 million to 31 million, claiming 91% customer satisfaction and the introduction of more than 70 new tilting trains at a cost of £1.5bn.

Tony Collins, Chief Executive of Virgin Rail Group, said today: “Naturally, we are all very disappointed by today’s announcement.

“We had submitted a strong, deliverable bid with emphasis on customer service which would have produced strong growth over the life of the franchise resulting in significant benefits for the taxpayer through generous premium payments to Government.”

 

[M60lad]

Considering First will now be operating the West Coast Franchise from December does this mean employees that work for First whether on the buses or trains will get discounted travel like they do at the moment with various First operated TOCs around the country, I know they get issued with ticket books or similar each year as a friend of mine who works for First Manchester makes good usage of his every year for his various trips out

 

[embers25]

“Our plans are not for taking catering off, we will be taking catering services throughout the trains and we will need more customer-facing staff for our service proposals.”

Does that mean no shop or buffets but trolleys "taking catering services throughout the trains"??!

 

[F Great Eastern]

As stated elsewhere, people moan about First having too many Franchises but NX had quite a few more several years ago

 

[harz99]

No change, just more stations added to the list.
I wouldn't say it's politically driven.
There is local demand, DfT are sceptical, First are giving them a punt.

I don't know about Wrexham, but for Lockerbie politics are certainly in play.

A Scottish station operated by Scotrail but with no Scotrail services; on WCML so service specified by DfT not Transport Scotland, TS in turn have little interest in improving service levels because passenger flows are at least equal (if not higher) to/from England than they are to Glasgow or Edinburgh.

Contrast that with the GSW line through Dumfries which serves many smaller communities than Lockerbie with a much higher level of service.

 

[DarloRich]

What examples do you have for it not being?

Look at the reaction on-line, it's predominately pro-Virgin, and predominately anti-First. Why would that be, do you think?

Because Virgin have a very strong brand. People know the name. The central themes of the virgin brand are well known and well pushed by their advertising & media. The branding suggests glamour, speed, happiness, fun where as First suggests, frankly nothing. (at least becuase they are unknown to many Virgin passengers)

I would suggest people are sorry to see the disappearance of a brand they recognise in favour of one they don’t or one that they, at best, associate with bus travel.

Add to that the massive publicity that Virgin pump out explaining how they are the saviours of the railway - the general public don’t understand how the railways work and Virgin know this and exploit this.

They use their brand awareness to drive forward the company message. This brand awareness gets them media access, much more media access than other rail companies. They also have a very well known figurehead who has great media access and media relations. he is well recognised and is listened to.

They are masters of PR, spin and media management. People just lap it up and believe it - perhaps some other companies could learn a few things

 

[HH]

Be very interesting to see if they continue the aggressive bid strategy for GW knowing they now have WC.

From today's City AM, "RAIL group FirstGroup yesterday reassured investors that potential losses on the hotly-contested West Coast main line could not exceed £265m, as shares in the firm slumped on news it had won the contract."

Who said GNER? Anyone for NatEx?

 

[LNW-GW Joint]

I've heard from a good source that the plan is to run a loop so in effect -

Euston Milton K Cov Bhm NS Wolves Telford Shrewsbury
Gobowen Wrexham Chester Crewe Milton K Euston

So it will combine the Wolverhampton and Chester services freeing up Voyagers and Pendolinos for other services.

Looks nice, but wouldn't Arriva Trains Wales have something to say about that?
If it was a regular service it would make their Chester-Shrewsbury-Birmingham service redundant.
Splitting at Wolves won't be popular, and you surely wouldn't have 10-coach sets wandering round Shropshire off-peak.
The simplest would be a single set doing the whole loop but I can't see that working from Euston to Wolverhampton.
But running all the Voyagers from a Chester/Crewe base, once the Scots are electric, seems a good idea.