Will Virgin East Coast mean an end for Open Access Operators?

[thenorthern]

Looking at the Virgin Trains East Coast proposals I notice that they plan a London to Sunderland train from 2015 which reminds me of a time which Wrexham and Shropshire started operating Virgin Trains introduced a London to Wrexham via Chester train which was obviously there to compete with the then new Wrexham and Shropshire service.

I also notice that they plan to introduce more London to Bradford Forster Square services which because Bradford is currently served by open access services operated by Grand Central I can imagine that it will do the same thing of getting passengers onto their trains rather than Grand Central.

Given Virgin West Coast's previous history of stopping any competition with moderation clauses, filling demand if its there is a demand there and offering better fares than competitors which they have done to Wrexham and Shropshire and the First North Western London services could the same thing happen now with Virgin Trains East Coast?

I am of the opinion that open access operators were partially to blame for GNER and NXEC failing finacially so could Virgin Trains East Coast try and end that trend?

 

[najaB]

I am of the opinion that open access operators were partially to blame for GNER and NXEC failing finacially so could Virgin Trains East Coast try and end that trend?

I am probably wrong, but I thought that GNER was basically profitable, it was the problems at the parent company that did in for them. On the other hand NXEC was badly run (as was NXEA): both franchises were over-bid in order to win competition and had next to no chance that the numbers would add up.

 

[fgwrich]

Given that both Open Access TOCs on the ECML are owned by two fairly large companies, I cannot see them likely to disappear without any form of fight. Meanwhile, with First Group part paying and arranging the finance for the electrification of the line from Selby to Hull in return for at least a 10 year or longer guarantee, so I can't see First being too happy with any form of Virgin trying to stamp their mark over Hull.

Wasn't the 'moderation of competition' installed on the WCML before any open access TOC were even thought of?

 

[dk1]

Given that both Open Access TOCs on the ECML are owned by two fairly large companies, I cannot see them likely to disappear without any form of fight. Meanwhile, with First Group part paying and arranging the finance for the electrification of the line from Selby to Hull in return for at least a 10 year or longer guarantee, so I can't see First being too happy with any form of Virgin trying to stamp their mark over Hull.

Wasn't the 'moderation of competition' installed on the WCML before any open access TOC were even thought of?

I was also under the impression that this was due to the huge new trains orders Virgin made in the late 90s. There was to be no more competition on the WCML or on the Birmingham to Bristol/reading corridors than that already existing. Even Central where blocked from operating a service to Oxford.

 

[LNW-GW Joint]

Given Virgin West Coast's previous history of stopping any competition with moderation clauses

Those West Coast clauses were set by the DfT (well, OPRAF and the SRA) and expired in 2012 with the old franchise.
There are none for the ICEC franchise.
DfT has contracted the offered VTEC services to new destinations, it is not a case of Virgin being anti-competitive.

 

[MK Tom]

why would the DfT contract a service to Bradford when another operator already runs there?

Hull are pretty safe but I too am concerned about Grand Central. I'd really like to see more, not fewer, open access operators in the UK. It doesn't help when big government keeps refusing their track access applications.

 

[hairyhandedfool]

Just like to point out that Virgin Trains East Coast is 90% Stagecoach, so Virgin will have very little, if any, say in what actually happens.

 

[sprinterguy]

Looking at the Virgin Trains East Coast proposals I notice that they plan a London to Sunderland train from 2015 which reminds me of a time which Wrexham and Shropshire started operating Virgin Trains introduced a London to Wrexham via Chester train which was obviously there to compete with the then new Wrexham and Shropshire service.

I also notice that they plan to introduce more London to Bradford Forster Square services which because Bradford is currently served by open access services operated by Grand Central I can imagine that it will do the same thing of getting passengers onto their trains rather than Grand Central.

I think that the greatest risk to Grand Central’s services from Virgin East Coast will be in division of ORCATS revenue between the two operators, rather than in absolute terms of abstraction of passengers.

I can only speak for the Sunderland route from personal experience, but while I can see the early morning VT East Coast service reducing passenger numbers on Grand Central’s 06:45 from Sunderland for those wanting a faster journey to London, beyond that I can’t see Virgin East Coast’s one return trip a day making much of a difference to GCs’ passenger loading profile on the route: The Grand Central trains run at convenient times throughout the day when I actually want to use them, whereas I cannot see many opportunities for me to ever need to use the new Virgin East Coast service, and the same will probably be true of much of the day trip and leisure market from the north east. And of course, the competition between York and London is already there.

 

[lincolnshire]

GNER failed because the parent company went bust ( that was Sea Containers )
and that was the end of there franchise.

NXEC as you say was just a total cock up from start to finnish. Its what can go wrong when your bid for the franchise goes very wrong because someone got things wrong ( I wonder if the bid team did any more biding ).

When East Coast went up for grabs they all bid with the knowledge of the open access operators up and running, if they don,t like it they should never had bid for the franchise.

 

[yorksrob]

Given Virgin West Coast's previous history of stopping any competition with moderation clauses, filling demand if its there is a demand there and offering better fares than competitors which they have done to Wrexham and Shropshire and the First North Western London services could the same thing happen now with Virgin Trains East Coast?

GC has some very competitive fares. Virgin would have to work hard to better them and to have the availability relatively close to the time of travel that GC has.

 

[Luke185]

I wouldn't be too worried about GC, a lot of their custom derives from places like Halifax and Hartlepool, not to mention York and Doncaster where there is already an abundance of competition. Their trains are vastly busier than a couple of years ago, certainly on the Bradfords. Any extra services from Sunderland via NCL or Huddersfield/Bradford Forster Sq via Leeds may take a few people away if they are aggresively priced, but are unlikely to have any drastic effect. In addition, a lot of the passengers using GC do so specifically to avoid the competition of what is now VTEC.

 

[Geezertronic]

I do feel that sometimes TOCs cannot win. On the one hand people were moaning that VTWC and VTEC may be a conflict of interest and lead to a lack of competition. Then when VTEC suggest they operate a service to a destination already served by another TOC (or OAO) then people wonder if VTEC are being anti-competitive and wonder why they would bother...

I would have thought that competition can only be good for the routes in question?

 

[misterredmist]

I am probably wrong, but I thought that GNER was basically profitable, it was the problems at the parent company that did in for them. On the other hand NXEC was badly run (as was NXEA): both franchises were over-bid in order to win competition and had next to no chance that the numbers would add up.

Yes, I make you correct GNER were undone by their parent company ( Sea Containers ? ) getting into financial difficulty, whereas NXEC over-estimated their revenues and couldn't survive the global meltdown......

 

[swt_passenger]

Then when VTEC suggest they operate a service to a destination already served by another TOC (or OAO) then people wonder if VTEC are being anti-competitive and wonder why they would bother...

It wasn't a VTEC suggestion, it was their response to DfT putting it in the ITT for the franchise, along with various other off route extra destinations:

2.1.2 A map of the ICEC Franchise area and routes is included in Appendix 2b. It includes four potential new destinations and a potential new route that Bidders may choose to serve. The four new destinations are:
 Huddersfield;
 Middlesbrough;
 Scarborough; and
 Sunderland (via Newcastle); and the potential new route is to:
 Harrogate (via York).

So perhaps the thread would be better off discussing if it's DfT want an end to OAO?

 

[fairysdad]

Just like to point out that Virgin Trains East Coast is 90% Stagecoach, so Virgin will have very little, if any, say in what actually happens.

Which, while true, is completely irrelevant for this thread given that nobody has said that it's Virgin and not Virgin Trains East Coast...

 

[47802]

I suspect the existing Open Access services will be OK, and the expanded VTEC services is as much about warding off further OA services such GNER alliance proposals in particular

 

[najaB]

Which, while true, is completely irrelevant for this thread given that nobody has said that it's Virgin and not Virgin Trains East Coast...

It's not totally irrelevant given that the OP said:

Given Virgin West Coast's previous history ... could the same thing happen now with Virgin Trains East Coast?

Thereby making the difference in ownership between VTEC and VTWC relevant.

 

[HSTEd]

Open Access Operators are supposed to catch things that fall through the cracks.

It doesn't mean that once they find these services they should be allowed to run them ad-infinitum.

 

[MK Tom]

They should if they run them at a higher standard and lower fares than a government franchise. The government shouldn't be muscling in and taking over routes from private companies that do a better job on their own. (not that that's happening in this case)

 

[HSTEd]

Its the government's railway - it is propped up by massive amounts of government money.
If they want to compete, let them on a purely open access basis - cut the NR grant to zero and direct that money to the franchised operators and watch as Hull Trains collapses in a matter of weeks thanks to drastically increased track access charges.

And I assume you would also demand that no other OAO be allowed to 'muscle in' on Hull Trains turf?
They should essentially have an eternal sinecure?

 

[MK Tom]

I would prefer to see as much of the railway as possible operated by open access operators. But then I would personally have vertical integration with fully privitised operation so that's going rather off topic then.

No I wouldn't demand that, other private operators should be encouraged to compete. That's the whole point of privitisation - competition improves quality and reduces fares, making everything better for the end user and in turn driving up patronage. Hasn't quite worked out right for various reasons.

 

[TUC]

Ot is one thing for those applying for a franchise to set out additional services that compete with open access operators. It is quite another for the Department of Transport to specify these as part of the franchise requirements.

 

[Clip]

Does the GC service take the same tiem from Sunderland to London as the proposed VTEC one via Newcastle? If not the GC service wont suffer will it?

 

[route:oxford]

I was also under the impression that this was due to the huge new trains orders Virgin made in the late 90s. There was to be no more competition on the WCML or on the Birmingham to Bristol/reading corridors than that already existing. Even Central where blocked from operating a service to Oxford.

What were the plans for a Central service to Oxford?

 

[dk1]

What were the plans for a Central service to Oxford?

Something like a Nottingham to Oxford service was very close to becoming reality but was refused permission. Would have been around mid 2000s.

 

[yorksrob]

Its the government's railway - it is propped up by massive amounts of government money.
If they want to compete, let them on a purely open access basis - cut the NR grant to zero and direct that money to the franchised operators and watch as Hull Trains collapses in a matter of weeks thanks to drastically increased track access charges.

And I assume you would also demand that no other OAO be allowed to 'muscle in' on Hull Trains turf?
They should essentially have an eternal sinecure?

But there are benefits to the passenger of having two companies with different fares structures on the same route. Perhaps if successful, the Hull trains service could be relet as a mini-franchise, with the proviso that no one company or parent company can run both it and the main EC franchise at the same time.

 

[IanXC]

It wasn't a VTEC suggestion, it was their response to DfT putting it in the ITT for the franchise, along with various other off route extra destinations:
[*Scarborough]

I wonder what the reasons for this not going ahead in VTEC's bid - and whether other bidders were proposing to run it.

Hull Trains have recently spoken of 'expansion beyond Beverley' although I can't see there would be paths via Bridlington - but I guess you could divide trains at Selby...

I suspect the existing Open Access services will be OK, and the expanded VTEC services is as much about warding off further OA services such GNER alliance proposals in particular

I agree - I think its very much in the EC franchise holders interests to use up newly created paths. Whether GNER will manage to get approval on Cleethorpes we will see in due course!

Open Access Operators are supposed to catch things that fall through the cracks.

It doesn't mean that once they find these services they should be allowed to run them ad-infinitum.

Im not sure that's the reality of the access rights they have - my understanding is that the rights of an OAO are similar to a freight operator. Ive always understood that there's got to be very good reason to take them away rather than just wanting to redistribute them.

 

[lincolnshire]

But there are benefits to the passenger of having two companies with different fares structures on the same route. Perhaps if successful, the Hull trains service could be relet as a mini-franchise, with the proviso that no one company or parent company can run both it and the main EC franchise at the same time.

Are you meaning that if East Coast Franchise had gone to First that they and First Hull Trains could,t run on the same franchise route?

Don,t forget that First Hull Trains is only 80% First and 20% Renaissance Trains.

Low and behold the same type of operation as Virgin Trains East Coast except 10% different.

 

[Deerfold]

They should if they run them at a higher standard and lower fares than a government franchise. The government shouldn't be muscling in and taking over routes from private companies that do a better job on their own. (not that that's happening in this case)

The government isn't taking over a route from GC. Some services will serve a City they do by a different route.

Are you meaning that if East Coast Franchise had gone to First that they and First Hull Trains could,t run on the same franchise route?

Don,t forget that First Hull Trains is only 80% First and 20% Renaissance Trains.

Low and behold the same type of operation as Virgin Trains East Coast except 10% different.

That should be fine - so long as they don't try and mix assets as with Chiltern and Wrexham & Shropshire.

 

[ainsworth74]

Does the GC service take the same tiem from Sunderland to London as the proposed VTEC one via Newcastle? If not the GC service wont suffer will it?

I think VTEC might end up being a bit quicker than the GC route. A fast run to Newcastle normally takes about two hours fifty minutes, figure maybe twenty minutes to get to Sunderland giving roughly three hours and ten minutes. GC take three hours and thirty to do Kings Cross to Sunderland. Obviously those are only rough estimates on my part.

No I wouldn't demand that, other private operators should be encouraged to compete. That's the whole point of privitisation - competition improves quality and reduces fares, making everything better for the end user and in turn driving up patronage. Hasn't quite worked out right for various reasons.

But by saying VTEC shouldn't be expanding into areas currently served by OAOs aren't you effectively saying that there shouldn't be competition? If the OAOs are competing against VTEC on some flows (London to Doncaster/York primarily) why shouldn't VTEC compete against them in other areas (via different routes no less)? Competition is good after all...