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The Telegraph: Possible First Group Break Up?

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700007

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Not that it is new news, as most of us are aware how much First is struggling to stay alive. A Telegraph article has suggested that First is in talks with rival companies such as Trenitalia, who run the c2c franchise, and National Express to take over a few Rail and Bus divisions.

What does the forum think about this?

Article can be found here :

https://www.telegraph.co.uk/busines...cle-firstgroups-assets-amid-break-up-rumours/

Rivals of transport giant FirstGroup are circling the struggling bus and rail operator amid hopes that a break-up is on the cards.

Senior insiders have told The Sunday Telegraphthat FirstGroup has held talks with state-backed Italian train titan Trenitalia over a sale of its UK rail arm.

It comes just days after Dean Finch, the National Express boss, admitted to an interest in some of FirstGroup’s UK bus operations.

Meanwhile, the company has appointed a crack squad of consultants to assess options for US bus subsidiary Greyhound.
 
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Bletchleyite

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First do have this uncanny ability to turn gold into the proverbial, don't they?

Maybe not such a bad thing. Perhaps Stagecoach might be interested in buying back SWT? :)
 

bnm

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National Express' CEO has already made it clear he's not interested in FirstGroup's rail division. Zero chance NatEx will takeover FG as a whole.
 

superalbs

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Hopefully Stagecoach buy back the South Western. The new bunch have been terrible!
 

The Planner

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Would be interesting to see how that affects their West Coast Partnership bid considering its a joint First/Trenitalia venture.
 

Tim456

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I would only be too delighted to see First finally relinquish the GWR franchise after all these years. What was a good franchise turned bad in 2006 when the new three in one franchise began. However, they’ve had a lot of help from Network Rail and Dft over the years to get it into the mess it’s in today.
 

700007

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Would be interesting to see how that affects their West Coast Partnership bid considering its a joint First/Trenitalia venture.
Considering Trenitalia is in talks to buy out a few rail divisions from First, I wouldn't be surprised to see First's share of the bid bought out. At the end of the day for that bid, it was First who needed Trenitalia, not the other way round!
 

coppercapped

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Keep them away from rail period.
SNIP
There don't seem to be any problems in Germany where National Express operates the Rhein Münsterland Express (RE7) and the Rhein Wupper Bahn (RB48) and has done since December 2015.
It also won the franchise for the Nürnberg S-Bahn network but didn't take it up because Deutsche Bahn ran such a long legal process about the result that NEx was no longer able to keep to the promised schedule. DBAG sees the S-Bahnen as part of its core business and fought tooth and nail to keep the Nürnberg operation.
 

gimmea50anyday

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since Keolis left TPE for First to go it alone this franchise hasn't exactly been the epitome of well managed either, a lot of staff want the incumbent (read incompetent) out and it is showing by the ill feelings internally amongst the front line staff
 

Bookd

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Despite various posts to the contrary regarding huge profits GB rail franchises are generally at best marginally profitable and at worst a disaster which is why NatEx are no longer interested. If Stagecoach were to take back SWR I would be happy with that but I am sure that they would demand a very good deal after just losing millions on the East Coast which could have destroyed their business.
 
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fgwrich

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I would only be too delighted to see First finally relinquish the GWR franchise after all these years. What was a good franchise turned bad in 2006 when the new three in one franchise began. However, they’ve had a lot of help from Network Rail and Dft over the years to get it into the mess it’s in today.

The problem and frustrating thing is, is anyone else going to be any better? While the current franchises problems have in part stemmed from the DfT and Network Rails inability to manage the GWEP, First doesn’t get away scotch free from the mess it’s become either. The sad thing is is that it was doing well as a Franchise until the rebrand. Since then, and as a manager put it to me last week, they’ve tried to make themselves look better while leaving the behind the scenes to fall apart. And now it’s showing, badly.

Going back to my main concern though, who could do any better? Arriva as we know tend to spend as little as possible (just look at the state of XC!), Stagecoach doesn’t like to invest much either other than to keeping its brand across its across its stock / fleets - See the similar franchise EMT for that.

I’m a little sad SWR seems to be failing too, while Stagecoach did ok with it under its tenure, the franchise needed some innovation pumped into it. Something new, something a little different. It had become too stale and Stagecoach had become too complacent - hence why they lost it. But Suprise suprise, Firsts grand plans just aren’t o be making it worse.

Perhaps they need either Mr Haines back at First, or even ironically ex First Group Mr Finch? Don’t forget that NX were vertically in a very similar situation for several years before they lost their core franchises then flogged C2C to Trenitalia!
 

CeeJ

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Well, if there were different circumstances in government, I'd say this is the perfect opportunity for the state to buy back a stake in the British rail and bus markets.

The problem and frustrating thing is, is anyone else going to be any better? While the current franchises problems have in part stemmed from the DfT and Network Rails inability to manage the GWEP, First doesn’t get away scotch free from the mess it’s become either. The sad thing is is that it was doing well as a Franchise until the rebrand. Since then, and as a manager put it to me last week, they’ve tried to make themselves look better while leaving the behind the scenes to fall apart. And now it’s showing, badly.

From what I've heard about Worst Late Western I'm not sure they were doing so well before the rebrand...
 

WatcherZero

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There don't seem to be any problems in Germany where National Express operates the Rhein Münsterland Express (RE7) and the Rhein Wupper Bahn (RB48) and has done since December 2015.
It also won the franchise for the Nürnberg S-Bahn network but didn't take it up because Deutsche Bahn ran such a long legal process about the result that NEx was no longer able to keep to the promised schedule. DBAG sees the S-Bahnen as part of its core business and fought tooth and nail to keep the Nürnberg operation.

The German commercial rail tends to be more concessions than franchises, they just operate the services for a fee and are given the rolling stock to do it (which is usually owned by local governments), a lot like subsidised and school bus operations in this country. They don't tend to take on revenue risk or pay franchise premiums.
 

dk1

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Be interesting to see what effect this has on the share price tomorrow morning.
 

gimmea50anyday

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the thing is, the problems within the franchises are not unique to first. It seems the same problems are manifesting itself throughout the industry and expertise and experience managers are being lost to graduate managers. With it the ability to listen to staff and the know how earned through front line experience is also being lost in a sea of ideas that look good on paper but in practice aren't feasible. If the profits really are marginal then why is the competition so intense to take on another franchise when they come up for renewal? There's more to this than we will ever know but as long as tory idealism looks like a duck and quack likes a duck and all that.......

you won't find many staff who believe TPE is well run, but TPE have been able to hide behind Northerns woes for so long, it has masked TPEs own failings to the point management can't see them. Nor will they see them when staff attempt to point them out. Yet first are seemingly employing more ivory tower managers while ditching the staff managers at the same time. Staff are being demoralised by this
 

Robertj21a

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It's probably time for First Group to get out of UK rail - and the UK bus business. They're not being run much more effectively than when Lockhead was in charge, and most people had assumed that anybody could improve on that !!

First Group needs to just leave itself with the 2 operations across the pond, dumping Greyhound in the process (if anybody wants it).
 

Carlisle

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Stagecoach doesn’t like to invest much either other than to keeping its brand across its across its stock / fleets -
Id have to slightly disagree with that, as a few years ago the old Northern borrowed an SWT 158 and reportedly quite a few punters on the Leeds-Carlisle line thought it was a brand new train.
 

3141

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. If the profits really are marginal then why is the competition so intense to take on another franchise when they come up for renewal? There's more to this than we will ever know but as long as tory idealism looks like a duck and quack likes a duck and all that...….

But the competition isn't intense. There were only two for South Western. In the end, there were only two for Wales and Borders. There are three for East Midlands and three for the West Coast partnership. South Eastern has four, but one of those is Govia, who probably feel that they have to bid or they may soon have no rail franchises, and another is Stagecoach, who face a similar prospect. What sort of things that we may never know do you think lie behind this, or do you just have difficulty believing that profit margins in the rail business are small?
 

coppercapped

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the thing is, the problems within the franchises are not unique to first. It seems the same problems are manifesting itself throughout the industry and expertise and experience managers are being lost to graduate managers. With it the ability to listen to staff and the know how earned through front line experience is also being lost in a sea of ideas that look good on paper but in practice aren't feasible. If the profits really are marginal then why is the competition so intense to take on another franchise when they come up for renewal? There's more to this than we will ever know but as long as tory idealism looks like a duck and quack likes a duck and all that.......

you won't find many staff who believe TPE is well run, but TPE have been able to hide behind Northerns woes for so long, it has masked TPEs own failings to the point management can't see them. Nor will they see them when staff attempt to point them out. Yet first are seemingly employing more ivory tower managers while ditching the staff managers at the same time. Staff are being demoralised by this
But the competition isn't 'intense'. The DfT is having trouble to get more than two or three bidders for the forthcoming franchises and it has managed to push out, or severely weaken, the UK-based holding companies First, Stagecoach, Go Ahead and Virgin. All the others have fallen by the wayside.

The ones that are left are the UK subsidiaries of European railway administrations - and these have much deeper pockets than the commercial UK businesses. Even these have foregone dividends or had to make loans to their UK operation over the past two or three years.
 

gimmea50anyday

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not any more as the folly of the current franchise system is finally being seen as what it really is. A waste of money. We have seen the east coast franchise fail 3 times and growth estimates on which franchises are based have been wrong repeatedly leading to either a lack of investment or a squeeze of the assets to milk every penny out just to make ends meet. Either way the public is being given a raw deal with bewildering fares structures and unfair pricing, excessive overcrowding and an unreliable service.
 

Robertj21a

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not any more as the folly of the current franchise system is finally being seen as what it really is. A waste of money. We have seen the east coast franchise fail 3 times and growth estimates on which franchises are based have been wrong repeatedly leading to either a lack of investment or a squeeze of the assets to milk every penny out just to make ends meet. Either way the public is being given a raw deal with bewildering fares structures and unfair pricing, excessive overcrowding and an unreliable service.


I wonder what the solution might be..........

:rolleyes:
 

3141

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I wonder what the solution might be......….:rolleyes:

Simplify the fares structure and cut out all those ridiculous cheap advance fares which no-one buys because they're "bewildering", reduce passenger numbers to a point where the overcrowding isn't "excessive" any more, and - somehow - make the trains more reliable.
 

Robertj21a

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Simplify the fares structure and cut out all those ridiculous cheap advance fares which no-one buys because they're "bewildering", reduce passenger numbers to a point where the overcrowding isn't "excessive" any more, and - somehow - make the trains more reliable.

That will kill off rail travel for me then. I only bother if I can get a 'ridiculous cheap advance fare' - I didn't know I was supposed to find them bewildering (really ??). Not many people could afford train travel at 'full' rates.
 

theironroad

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Simplify the fares structure and cut out all those ridiculous cheap advance fares which no-one buys because they're "bewildering", reduce passenger numbers to a point where the overcrowding isn't "excessive" any more, and - somehow - make the trains more reliable.

Haha, tocs can't win. Offer cheap fares and people say scrap them.........
 

3141

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Sorry if that got you worried! It followed on from post #25 which referred to "bewildering fares structures". I agree there are a lot of different fares which some people won't readily understand, but as they all sell then apparently enough people do understand them. If the system was greatly simplified the cheapest fares are the ones most likely to disappear. Where trains are already the maximum possible length for the local infrastructure and there is no room to run more of them, the only way to reduce overcrowding would be to reduce the number of passengers, which removing cheaper fares would help achieve, though it would be tough on those who have to go by train. Reorganisation, whether nationalisation or something else, won't by itself solve the problems.
 
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