Cross Country Trains - Who will operate it after October?

[Baz2000]

Hi all i was woundering who will run the cross country trains after oct 2023 will cross country still run them or will it be a new company thanks

 

[Master29]

Crosscountry aren't as such a company on their own, They're a region of operation, as it was with Virgin Cross-country. They are at present run by Arriva but who will be the next franchise operator I do not know..

 

[Diedinium]

Well, it's not even really a "franchise" anymore, I suspect they'll just give Arriva another contract extension to keep running it for now.

 

[Baz2000]

ok thanks

 

[ainsworth74]

Smart money is on another contract extension surely? If they were actually going to be running a tender process it would have surely needed to have started by now in order for any replacement to be chosen and them mobilise to take over in October. Only other option would be Operator of Last Resort as with LNER or Northern.

 

[NickBucks]

In the current climate I doubt that any company would submit a tender to run Cross Country or any "franchise" save for incumbents. It appears that established operators are not interested leaving any new operators to apply for open access services only.

 

[occone]

Looks like they are seeking a direct award:

Cross Country rail services: prior information notice

Prior information notice (PIN) for direct award of Cross Country rail services contract.

www.gov.uk

So indeed it looks like nothing is going to change with XC any time soon

They even say the envisage things to be "substantially similar":

Cross Country rail services: prior information notice

www.gov.uk

I'll happily be proved wrong

 

[dk1]

Just another extension. Why complicate things?

 

[Doctor Fegg]

Crosscountry aren't as such a company on their own, They're a region of operation, as it was with Virgin Cross-country.

They’re a franchise just like any other, currently on a direct award. The current holder is XC Trains Ltd: https://find-and-update.company-information.service.gov.uk/company/04402048

I have no idea what a “region of operation” is meant to mean.

 

[Martin_1981]

I guess the Government are giving direct awards to TOC's as re tendering is time consuming and costly and there are wider issues they need to get on top of.

 

[LNW-GW Joint]

Until "GBR" or whatever turns up in its place, there are unlikely to be changes in the franchise map.
Even then XC is a curious egg, reaching far into other TOCs' geographic ("regional") patches.
Owner Arriva is a major operator with Chiltern and the LO TfL concession as well as open access GC.
DfT won't want to disturb that group of TOCs unless there are contractual issues.
Unlike some other TOCs, XC just seems to quietly get on with the job.

 

[Unstoppable]

Just another extension. Why complicate things?

Doesn't the railway usually complicate things?

 

[Snow1964]

Just another extension. Why complicate things?

What happens if someone else comes along and offers to do it for 90% of the management fee margin current operator would get.

Nothing is certain, can't even assume current operator wants another 4-8 years of it considering how difficult it has become to operate easily in recent years. These days Arriva have other sources of income like recent deal in Czech Republic.

 

[LNW-GW Joint]

What happens if someone else comes along and offers to do it for 90% of the management fee margin current operator would get.
Nothing is certain, can't even assume current operator wants another 4-8 years of it considering how difficult it has become to operate easily in recent years. These days Arriva have other sources of income like recent deal in Czech Republic.

Arriva has been up for sale by DB for several years, as they retrench back to domestic German operation.
Like Abellio, DB may back out of unprofitable UK operation.

 

[JonathanH]

What happens if someone else comes along and offers to do it for 90% of the management fee margin current operator would get.

What are the savings that one owning group could make over another to operate the same given service, with the same broad level of costs that could be reflected in a lower management fee?

 

[dk1]

What happens if someone else comes along and offers to do it for 90% of the management fee margin current operator would get.

Nothing is certain, can't even assume current operator wants another 4-8 years of it considering how difficult it has become to operate easily in recent years. These days Arriva have other sources of income like recent deal in Czech Republic.

It would have to go out to tender though wouldn't it?

Nothing is as straightforward as that on the railways.

 

[Snow1964]

What are the savings that one owning group could make over another to operate the same given service, with the same broad level of costs that could be reflected in a lower management fee?

I was thinking more along the lines of if the parent DB are considering putting Arriva up for sale, they would want to show the business as profitable and with potential to grow, not we have a division that lingers on.

Not so much that another company would undercut it, more they would want higher rate to renew, or not bother, because current rate looks more plodding on which is hardly going to appeal to a potential buyer. Trying to consider would the group look better to a buyer without it, with management time and resources not tied up.

Although it's a few years since I last got caught up in a corporate buyout, my experience was the corporate raiders look to asset strip divisions, selling off profitable bits, and closing sections. If they renew are rather stuck with 4-8 years of plodding on, whilst not appealing to either of these.

 

[Diedinium]

Arriva has been up for sale by DB for several years, as they retrench back to domestic German operation.
Like Abellio, DB may back out of unprofitable UK operation.

Lol we're so good at unprofitable train operations that we even manage to make it unprofitable for other countries rail operators!

 

[43096]

Crosscountry aren't as such a company on their own

So what is XC Trains Ltd. if not a company?

 

[Snow1964]

Crosscountry aren't as such a company on their own, They're a region of operation, as it was with Virgin Cross-country. They are at present run by Arriva but who will be the next franchise operator I do not know..

Yes they are, company number 04402048

They have just filed their annual accounts, and if you read the strategic report (first few pages) will be clear what they do and where they are expecting to be

XC TRAINS LIMITED filing history - Find and update company information - GOV.UK

XC TRAINS LIMITED - Free company information from Companies House including registered office address, filing history, accounts, annual return, officers, charges, business activity

find-and-update.company-information.service.gov.uk

Of more direct concern to this thread, is the Uncertainty related to going concern (page 14 of accounts), explains that DfT instead of offering short extension issued Prior Info notice last December and went out to tender in March, and potentially XC won't have contract from September (this part by auditors is dated 21st July), so clearly couldn't show auditors they had been awarded an extension on 21st July, otherwise this would have been deleted prior to signing. Goes on to say if XC don't get another contract expected to be wound down.

 

[Bald Rick]

What happens if someone else comes along and offers to do it for 90% of the management fee margin current operator would get.

There is no facility for that to happen.

 

[12LDA28C]

Lol we're so good at unprofitable train operations that we even manage to make it unprofitable for other countries rail operators!

Even at their best, margins for train operators were no more than 2 or 3%. Hardly a licence to print money.

 

[Clarence Yard]

I was thinking more along the lines of if the parent DB are considering putting Arriva up for sale, they would want to show the business as profitable and with potential to grow, not we have a division that lingers on.

Not so much that another company would undercut it, more they would want higher rate to renew, or not bother, because current rate looks more plodding on which is hardly going to appeal to a potential buyer. Trying to consider would the group look better to a buyer without it, with management time and resources not tied up.

Although it's a few years since I last got caught up in a corporate buyout, my experience was the corporate raiders look to asset strip divisions, selling off profitable bits, and closing sections. If they renew are rather stuck with 4-8 years of plodding on, whilst not appealing to either of these.

Well, for an Owning Group, an NRC is about as near to free money as you are going to get so you are not going to chuck those opportunities in the bin.

Even at their best, margins for train operators were no more than 2 or 3%. Hardly a licence to print money.

For DfT TOCs, there is no such thing as margin anymore, just fees. That is a licence to print money, especially when both the fixed base fee and performance fee are a one way bet and the majority of your contract performance fee doesn’t relate to train performance at all!

It’s relatively easy money compared to running a franchise or a concession.

 

[Master29]

So what is XC Trains Ltd. if not a company?

Yes they are, company number 04402048

They have just filed their annual accounts, and if you read the strategic report (first few pages) will be clear what they do and where they are expecting to be

If you read what I said they are under the DB group (I didn't mention that admittedly) with Arriva. Granted though, they have a company number. Just semantics really.

 

[Mamorin]

So indeed it looks like nothing is going to change with XC any time soon

They even say the envisage things to be "substantially similar":

Guess XC won't be reinstating any of the cut calls that were not reinstated at the May 2023 timetable.

 

[Energy]

Well, for an Owning Group, an NRC is about as near to free money as you are going to get so you are not going to chuck those opportunities in the bin.



For DfT TOCs, there is no such thing as margin anymore, just fees. That is a licence to print money, especially when both the fixed base fee and performance fee are a one way bet and the majority of your contract performance fee doesn’t relate to train performance at all!

It’s relatively easy money compared to running a franchise or a concession.

It would honestly be impressive if someone manages to loose money on an NRC.

 

[TT-ONR-NRN]

It’s bluddy boring to be honest. We haven’t had a new TOC come around since Avanti West Coast (don’t be annoying and mention the invisible OLR takeovers of late). I love a bit of change here and there.

 

[Snow1964]

Guess XC won't be reinstating any of the cut calls that were not reinstated at the May 2023 timetable.

As this is a speculative thread, and we know from the DfT Prior Info notice that new contract will be 4 years, extendable to 8 years, seems very unlikely to me that they would be allowed to continue at current pared back level until Autumn 2027 and potentially through to 2031

Roger Ford in his pre Modern Railways ezine, has commented that DfT have finally worked out that if can't cut costs easily, the only way to cut subsidy is to boost revenue, by going for growth. This also seems to conflict with the idea of not adding services quickly.

Of course growth requires more bums on seats, but that means providing the seats, you can't easily up the fares if your offer is poor compared to a UK domestic flight. It is daft when say a Somerset resident can get to Scotland cheaper by flying, or cheaper and quicker by adding 100 miles and travelling on rail via London. They need to accept people actually travel from NW to SW, and would not prefer to do it via SE. XC needs to stop thinking it is a local and medium distance service for the Midlands, and everything else is an inconvenient add on

Of course we all know some companies that bid are all hot air and over promise, remember SWT promises adding thousands of extra peak hour seats in Waterloo, instead they failed to do it before pandemic happened, then subsequently cut around 22% of their vehicle km.

Personally I am hoping for someone else to get XC, preferably one of the operators understanding potential growth (even if until now DfT has rather prevented it from actually happening), failing that someone who has experience of suitable trains to supplement the fleet, East Midlands with their 222s perhaps ? Or someone that will bring in the 222s (or something else modern and reliable), and be prepared to scrap half the class 220 driving cars, whilst reforming remainder into 6car sets. In my view XC shouldn't have 4car trains. Need a new operator with vision, not a giver up who something below bare minimum.

 

[MattRat]

Of course growth requires more bums on seats, but that means providing the seats, you can't easily up the fares if your offer is poor compared to a UK domestic flight. It is daft when say a Somerset resident can get to Scotland cheaper by flying, or cheaper and quicker by adding 100 miles and travelling on rail via London. They need to accept people actually travel from NW to SW, and would not prefer to do it via SE. XC needs to stop thinking it is a local and medium distance service for the Midlands, and everything else is an inconvenient add on

Or if it won't change, commit to the model. Cut service length back and let other operators handle the final mile if people travel that far. That way they could run more doubles with the current stock level. It's not ideal, but it's still more logical than current operations.

 

[JonathanH]

Or someone that will bring in the 222s (or something else modern and reliable), and be prepared to scrap half the class 220 driving cars, whilst reforming remainder into 6car sets.

No operator can reform the 220s and scrap driving cars as they are beholden to what the lease company wants to do with its asset.

Any operator, including the current one can discuss the best options for increasing capacity with the DfT and leasing companies, but they are not in a position to act alone, and they are working to specifications.

If anything, what XC lacks is an effective lobby group who can encourage a different service specification. I'm not sure the operator really has scope for lobbying to run a different service now.