The Telegraph: Possible First Group Break Up?

[dk1]

Time to bring the franchises back under public ownership.

Very doubtful indeed.

 

[Bletchleyite]

I don't entirely see why there's lots of shouting about wanting Trenitalia/FS more involved, as they are as a train operator dire at best. Yes, they have some flashy high speed trains, but that's because their Government coughed up for them just as they will be doing for us.

 

[Robertj21a]

Hasn't seemed to have much an effect on the share price yet. Here's hoping

It won't have much impact. Investors are more than used to First Group's woes, so it's built in to their (already low) share price.

 

[SideshowBob]

Very doubtful indeed.

What's doubtful? That that will happen, or that it would be a good thing if it did?

 

[dk1]

What's doubtful? That that will happen, or that it would be a good thing if it did?

Doubtful that it will be renationalised & not a good thing in my opinion if it was. Privatisation hasn't done me any harm.

 

[dk1]

It won't have much impact. Investors are more than used to First Group's woes, so it's built in to their (already low) share price.

Yeah I know. I've never come close to breaking even even lol.

 

[SideshowBob]

Doubtful that it will be renationalised & not a good thing in my opinion if it was. Privatisation hasn't done me any harm.

Fair enough. It'll be interesting to see what does happen in this case. Somewhat ironically, privatisation doesn't seem to have done/be doing First Group any favours! FWIW, I hope they don't go belly up; I shudder to think what would happen to my local bus services if they did, at least in the short term! I still don't get why TPE isn't making money for them, though. You got any idea?

For the record, I do think that gradual and sensible renationalisation of the UK rail network, perhaps along the lines of BR sectorisation, would absolutely be a good thing, but don't want to get off-topic

 

[Robertj21a]

Fair enough. It'll be interesting to see what does happen in this case. Somewhat ironically, privatisation doesn't seem to have done/be doing First Group any favours! FWIW, I hope they don't go belly up; I shudder to think what would happen to my local bus services if they did, at least in the short term! I still don't get why TPE isn't making money for them, though. You got any idea?

For the record, I do think that gradual and sensible renationalisation of the UK rail network, perhaps along the lines of BR sectorisation, would absolutely be a good thing, but don't want to get off-topic

Privatisation won't be successful in any company if the guy at the top pulling all the strings is out of his depth and nobody stands up to him........

 

[KashmireHawker]

Personally I think First should...
- Sell both TPE and GWR to Trenitalia.
- Flog their share in SWR to Stagecoach.

Then for their bus division...
- Sell Worcestershire, Potteries and Leicester operations off to National Express.
- Break up First West Yorkshire and sell to Stagecoach, Trenitalia (if they fancy having a go running buses) Go Ahead and Transdev. (By smashing the almost monopoly in West Yorkshire your increasing and encouraging competition).
- Sell the Kernow operation off to Cornwall Council so that they can 'state run' the local bus network.

If First sold Worcestershire off to NX, West Mids Mayor Andy Street would probably chomp at the bit, to interlink it into the soon to be "West Midlands Bus - proudly ran by National Express" brand. And I think they can thanks to the way the WMCA and TfWM works.

Back on the Trains; such a scenario as stated above I think could happen, although Stagecoach's financial issues will probably limit them in getting any franchises at the moment. As much it would be beneficial for Stagecoach to take SWR back, the backlash would be immense from the DfT and others.

 

[js1000]

Lots of posts on this thread mentioning that TPE is making a loss? Hard to understand why. The trains are frequently busy and overcrowded, and prior to the last timetable change, the service wasn't impossibly unreliable in the way it has been since. Apart from the timetable, the only major change has been that First no longer operate the franchise in partnership with anyone else. I'm presuming that the DfT are shelling out for the new trains. I don't understand why the franchise isn't making money so what am I missing?

I think First had done well modernising the TransPennine franchise over the past 15 years. Ok, reliability is ocassionally brought into question. But they have a modern fleet which shames Northern Rail and generally passengers loads are healthy. If you can't make money from that then the franchise model is broken.

 

[SideshowBob]

I think First had done well modernising the TransPennine franchise over the past 15 years. Ok, reliability is ocassionally brought into question. But they have a modern fleet which shames Northern Rail and generally passengers loads are healthy. If you can't make money from that then the franchise model is broken.

Northern-only Advance Singles between Leeds and Manchester via Hebden Bridge are very competitively priced. If your extra travel time can usefully be spent, and the chances are that you'll be on a refurbed 158, you really might as well. TPE needs to up its reliability game, and fast.

 

[coppercapped]

OK, so if First Group's apparent financial problems have something to do with the DfT, and replacing the unpopular and widely discredited person currently in charge of the DfT wouldn't help, what would?

An understanding of the underlying issues perhaps?

Looking at the DfT's accounts (which can be found on-line) one can see that in 2016 the ‘income received from TOCs’ (that is the franchise premium payments) was nearly £1.9 billion. These accounts also show that ’support for passenger rail services’ (that is the subsidy paymensts) was just £374 million.

In other words, DfT makes a surplus of roundly £1.6 billion on passenger train franchising in England; TOC subsidy and premium payments for Wales and Scotland are devolved matters so do not show in the DfT's books.

This amount represents about half of the DfT’s income. The DfT also funds the design and construction of HS2, the expenditure on which in 2016-17 was £538 million, and expenditure on the trunk road network as well as its other activities. In other words, the more DfT can squeeze out of the existing railway, it doesn't need to ask the Treasury - and therefore the commercial and private taxpayers - for so much money.

So this is the underlying reason why trains now are too few, too short and cheap hard seats have been installed - the TOCs are being squeezed as never before.

...and as HS2 construction starts in earnest the DfT's spend on this alone will grow to some £2,000 or £3,000 million per year...

Don't be simplistic and think that getting rid of Grayling will have any effect on this at all.

 

[theironroad]

An understanding of the underlying issues perhaps?

Looking at the DfT's accounts (which can be found on-line) one can see that in 2016 the ‘income received from TOCs’ (that is the franchise premium payments) was nearly £1.9 billion. These accounts also show that ’support for passenger rail services’ (that is the subsidy paymensts) was just £374 million.

In other words, DfT makes a surplus of roundly £1.6 billion on passenger train franchising in England; TOC subsidy and premium payments for Wales and Scotland are devolved matters so do not show in the DfT's books.

This amount represents about half of the DfT’s income. The DfT also funds the design and construction of HS2, the expenditure on which in 2016-17 was £538 million, and expenditure on the trunk road network as well as its other activities. In other words, the more DfT can squeeze out of the existing railway, it doesn't need to ask the Treasury - and therefore the commercial and private taxpayers - for so much money.

So this is the underlying reason why trains now are too few, too short and cheap hard seats have been installed - the TOCs are being squeezed as never before.

...and as HS2 construction starts in earnest the DfT's spend on this alone will grow to some £2,000 or £3,000 million per year...

Don't be simplistic and think that getting rid of Grayling will have any effect on this at all.

Correct me if I'm missing the point but surely the DfT must use at least part of that £1.6bn to fund network rail. No?

 

[LNW-GW Joint]

I think First had done well modernising the TransPennine franchise over the past 15 years. Ok, reliability is ocassionally brought into question. But they have a modern fleet which shames Northern Rail and generally passengers loads are healthy. If you can't make money from that then the franchise model is broken.

On the new TPE franchise, revenue is down and costs are up (all those refurbs and rebranding etc).
First have provisioned additional £100m cost over the length of the franchise.
A similar background to VTEC, but not as severe.

 

[hwl]

Correct me if I'm missing the point but surely the DfT must use at least part of that £1.6bn to fund network rail. No?

And more in addition to!
You need to look at both the DfT annual managed expenditure and CapEx budgets not just AME which is where the franchsing revenue shows up

 

[dorsetdesiro]

TPE is in the process of transforming from a regional service using commuter express Desiro trains to a fully fledged national (mostly up North) intercity service using proper new HST style trains. Then this would require a lot of money which First would be hoping this could pay off at the end.

When the changes are complete and all new trains in service then this could attract more passengers as a credible alternative to LNER and VTWC and I probably will be happy to pay extra to take a faster TPE service at short distance over Northern if they're stopping at the same stations.

With TPE not doing well financially, it is early days as the changes are still in process as I don't really fancy the idea of sitting in a Desiro from Manchester to Glasgow (this is longer than Bournemouth to Waterloo with SWR in the similiar 444s!) but the comfort & experience could improve with the new trains and if this takes off well then maybe it could become profitable later on.

If First soon retreats from TPE then the new upgraded TPE could attract a foreign intercity operator to take over or go into partnership with a UK based company?

 

[Bletchleyite]

With TPE not doing well financially, it is early days as the changes are still in process as I don't really fancy the idea of sitting in a Desiro from Manchester to Glasgow (this is longer than Bournemouth to Waterloo with SWR in the similiar 444s!)

Er, the stock on order for those services is basically CAF's OHLE 125mph version of the 444, surely? The 444 has better seats...

Though that said I think the Class 444 is the most pleasant, as a passenger, InterCity train in the UK. Good seats, good pitch, big windows, airy feel, reasonable-ish ride, decent First Class (until First ruin it by changing it to 2+2) - what isn't to like? Maybe replace 4 seats per coach with bigger luggage racks and you'd be there.

 

[LOL The Irony]

- Sell the Kernow operation off to Cornwall Council so that they can 'state run' the local bus network.

That can't happen due to the government baning LA's from setting up bus companies.

 

[dorsetdesiro]

Er, the stock on order for those services is basically CAF's OHLE 125mph version of the 444, surely? The 444 has better seats...

Though that said I think the Class 444 is the most pleasant, as a passenger, InterCity train in the UK. Good seats, good pitch, big windows, airy feel, reasonable-ish ride, decent First Class (until First ruin it by changing it to 2+2) - what isn't to like? Maybe replace 4 seats per coach with bigger luggage racks and you'd be there.

Oh right, must be my mistake then that I thought TPE are getting new loco hauled Mk5 intercity fleet? Perhaps the Manchester to Glasgow route is getting those CAF trains, oh well, I'm a southerner so wouldn't always be familiar with things up there though I do hope the improved TPE would bring better services for weary Northerners if Arriva Northern continues to perform badly or their old trains drive customers to take TPE instead.

 

[Domh245]

Oh right, must be my mistake then that I thought TPE are getting new loco hauled Mk5 intercity fleet? Perhaps the Manchester to Glasgow route is getting those CAF trains, oh well, I'm a southerner so wouldn't always be familiar with things up there though I do hope the improved TPE would bring better services for weary Northerners if Arriva Northern continues to perform badly or their old trains drive customers to take TPE instead.

TPE are getting 3 new fleets, the first of which are the loco hauled Mk5s (built by CAF), but they'll be on Liverpool/Manchester - Scarborough/Middlesborough. The CAF EMUs will serve the West Coast routes (Manchester/Liverpool - Glasgow/Edinburgh via Carlisle)), and then there are also Hitachi 802s for Manchester/Liverpool - Newcastle/Edinburgh (via Leeds).

 

[dorsetdesiro]

I agree about the 444s, I love these as well as 442s, which I think are perfectly fine for going to London from the South Coast, Midlands (LNR have the 350s) and East Anglia (GA have the 360s also it was once proposed to replace all older East Anglia intercity trains with Desiros) also I love commuting on the 442/444 on few stops in Dorset also taking the bicycle, bliss!

For much longer distances, I'd prefer to take a HST for the comfort and sitting back to read stuff for hours also for the buffet car etc. I understand this is sadly changing for thinner seating with food trolley service as with the 800s that Scots are lucky to get the HSTs with ScotRail, no ironing boards! I hoped TPE may offer a better experience than the Desiros for Northerners which disappointingly the new CAFs don't sound much different that they may as well keep the Desiros...

I understand the TPE Desiros are transferring to WMT? So good news for London Northwestern!

 

[LOL The Irony]

I understand the TPE Desiros are transferring to WMT? So good news for London Northwestern!

Their current fleet consist's of entirely Desiro's. (It's the 350's leaving for those who don't know. They were subleased from London Midland anyways)

 

[dorsetdesiro]

TPE are getting 3 new fleets, the first of which are the loco hauled Mk5s (built by CAF), but they'll be on Liverpool/Manchester - Scarborough/Middlesborough. The CAF EMUs will serve the West Coast routes (Manchester/Liverpool - Glasgow/Edinburgh via Carlisle)), and then there are also Hitachi 802s for Manchester/Liverpool - Newcastle/Edinburgh (via Leeds).

Thanks for the update! So I take it the Mk5s won't be anything like for example the LNER and GWR HSTs as these won't be going as far to Glasgow/Edinburgh?

 

[LOL The Irony]

Thanks for the update! So I take it the Mk5s won't be anything like for example the LNER and GWR HSTs as these won't be going as far to Glasgow/Edinburgh?

They still have a heafty InterCity service to travel so I wouldn't write them off for such things.

 

[dorsetdesiro]

That can't happen due to the government baning LA's from setting up bus companies.

First Kernow buses may possibly end up with Go Ahead's Go South Coast as they operate numerous bus services in the South stretching from Brighton to Bournemouth?

 

[Bletchleyite]

TPE are getting 3 new fleets, the first of which are the loco hauled Mk5s (built by CAF), but they'll be on Liverpool/Manchester - Scarborough/Middlesborough. The CAF EMUs will serve the West Coast routes (Manchester/Liverpool - Glasgow/Edinburgh via Carlisle)), and then there are also Hitachi 802s for Manchester/Liverpool - Newcastle/Edinburgh (via Leeds).

FWIW it looks to me very much like the CAF WCML EMUs will be the nicest of the three so far as passenger comfort goes - bigger windows and near full window alignment of seating, unlike the other two types.

 

[theironroad]

Er, the stock on order for those services is basically CAF's OHLE 125mph version of the 444, surely? The 444 has better seats...

Though that said I think the Class 444 is the most pleasant, as a passenger, InterCity train in the UK. Good seats, good pitch, big windows, airy feel, reasonable-ish ride, decent First Class (until First ruin it by changing it to 2+2) - what isn't to like? Maybe replace 4 seats per coach with bigger luggage racks and you'd be there.

However, the plan is all about seats, seats, seats which is why the 444 plans have removal of the buffet, guards office and some of the (already too limited) cycle spaces....though it's only 13 days until First have had the keys for a year and we've yet to see any 444 even partially refurbed..

 

[CeeJ]

That can't happen due to the government baning LA's from setting up bus companies.

They could take the bus route over and franchise it out like TfL.

 

[dorsetdesiro]

Their current fleet consist's of entirely Desiro's. (It's the 350's leaving for those who don't know. They were subleased from London Midland anyways)

Ah yes, I forgot about the 185s, are these going to Northern?

I just saw some photos of the refurbished 185s, seems quite excessive if TPE aren't keeping these. Though I do like the results like the hexagonal blue-purple carpet and the wood effect tables & walls only if SWR were as imaginative! The light grey headrests could get the problem of sweat or saliva stains!

I see the new LED lighting looks glarry that SWR would be getting those same fixtures for the 442s and 444s/450s also possibly for the 158s/159s. Oh why does LED striplighting have be so ugly, just see those inside GWR's 150s!

 

[kje7812]

Ah yes, I forgot about the 185s, are these going to Northern?

I just saw some photos of the refurbished 185s, seems quite excessive if TPE aren't keeping these. Though I do like the results like the hexagonal blue-purple carpet and the wood effect tables & walls only if SWR were as imaginative! The light grey headrests could get the problem of sweat or saliva stains!

I see the new LED lighting looks glarry that SWR would be getting those same fixtures for the 442s and 444s/450s also possibly for the 158s/159s. Oh why does LED striplighting have be so ugly, just see those inside GWR's 150s!

They're leather so a bit easier than fabric.