Virgin / Stagecoach win East Coast

[Chrism20]

Thanks - I was looking for something that suggested a bit more but wasn't getting anything. That sounds interesting - I wonder if they may have a wider range and be able to accomodate various dietry requirements on pre-ordered food?

Hopefully it does. At least it would give you a decent chance of getting the food item you wanted.

 

[The Ham]

The problem with this franchise that won't go away is the amount bid.
GNER failed at £1.3bn over 8 years
NXEC failed at £1.4bn over 7 years
DOR succeeded at £1bn over 5 years

Allegedly VTEC will pay £3.3bn over 8 years. More than twice as much as DOR and two previous failures couldn't even manage that.

The *only* way they can do this is via huge fare increases. OK so they will reach more destinations for the last 3 years, but the leasing costs are higher too.

As a regular East Coast passenger I am not viewing this new franchise as a good thing......

The stagecoach press release states the £3.3bn as £2.3bn:

http://www.stagecoach.com/media/news-releases/2014/2014-11-27.aspx

The committed premium payments of £2.3bn represents the forecast premium payments over the core franchise period to 31 March 2023, expressed in 2014/15 prices and discounted using the UK Government’s “real” discount rate of 3.5% per annum. Actual premium payments are subject to change in accordance with the contractual arrangements.

There are also a few things that have changed;

First up inflation and passenger numbers mean that the income will be higher now than it was for the other operators.

Secondly, even before IEP's are introduced Virgin/Stagecoach are increasing the number of places served.

Thirdly, IEP will increase the number of available seats. Not just on each service (between 14% and 18% per train) but across the day by being able to run more services per train.

Fourthly, there will be services which will be cheaper run due to IEP. As rather than having to run a full length HST from London to Aberdeen or Inverness burning diesel all the way IEP can allow a 10 coach train to run between London and Edinburgh using electric traction, then by splitting the train, a 5 coach bi-modal unit travels the rest of the way.

I'm not saying there isn't a risk, but I am saying that it may not be as clear cut as it may look at first glance.

 

[Chrism20]

Note how the press release says "order" and not "have delivered". Burnley FC offer an "iPie" app (run by a company called Preoday) - you place your order at any time, then collect your order from the concession stand without having to queue with the rest of the pie buyers. I wonder if the proposed offering will be something similar.

Going by comments about the increased presence in standard I think there will be some form of at-seat at least to start with. This three billion is going to have to be made somewhere.

One other thing that jumped out from the stagecoach press release was the recruitment of thirty new security and revenue protection personnel that will be trained as special constables.

 

[Stats]

I don't know about anybody else but I was a bit lost of what was being introduced when. So it helps me to recap on what we already know on service plans, and add some detail obtained from the regional press notices:

From December 2015:
New weekday service between London and Sunderland
New service between London and Falkirk, Stirling

From May 2016:
4 additional London-Edinburgh services
More Peterborough to Edinburgh services


From May 2019:
7 daily direct services between London, Stevenage and Lincoln
Direct weekday service to Huddersfield via Dewsbury, calling at Grantham
Sunderland service to call at Grantham and Newark NG
New direct links between Grantham and Harrogate, and between Newark North Gate and Leeds and Harrogate.
Faster journeys between Edinburgh and London
3tph between London and York
Additional 2 hourly trains between London and Bradford, Shipley and Harrogate

From May 2020:
New SET timetable with faster services
6 2-hourly weekday direct services between London and Middlesbrough
Second weekday direct service between London and Sunderland
Aberdeen and Inverness services call at Durham, Doncaster and Peterborough
15 minute improvement on journey times from Lincoln and 7 minutes from Retford
Faster journeys between Newcastle and Edinburgh


Stevenage to continue to be served by 2tph weekdays, extended to weekends from 2019.
Smart ticketing available between London, Stevenage and Peterborough.

 

[Tetchytyke]

Even going back to the BR days the Pendolino's are light years ahead of anything that was running on the WCML back then, at least in my opinion.

Funny, isn't it, how the Pendolino technology was created by British Railways. It was sold to Fiat Ferroviaria in the early 90s. Virgin simply bought BR technology back from the Italians.

Rushed through after only four and a half years of the current Government? Breakneck speed!

It'd have been done sooner if DafT hadn't made such a horlicks of the WCML franchise bid. It's still been shoved through before the election.

People are going to complain regardless.
New ECML franchise will pay significantly less than £200m/ year in premium to the Government (the amount that DOR was paying annually) = "the Government have sold it too cheap, it was politically motivated, we'd be better off with a nationalised railway that would have meant more money kept for the Government"
New ECML franchise will pay roughly £200m/ year in premium to the Government = "there was no point in franchising it to the private sector since we are going to be no better off - we could have kept it nationalised and done just as well"
New ECML franchise will pay significantly more than £200m/ year in premium to the Government = "they've overbid, they are bound to go bust and hand the keys back, the only way they can do this is by cutting everything back to the bare minimum, ramping up every fare and abandoning all maintenance"

But each of those positions is a legitimate argument.

If they had agreed premiums less than or equal to DOR's profit, then it's clear the franchise would have been undersold.

They're offering more than DOR then someone is going to have to pay for it. Given that economies of scale on HR won't save that much money, we're either going to see "private sector efficiency" producing the extra money, or that money will be coming out of the pockets of passengers (fare rises) or the taxpayer (cap-and-collar subsidy, which Souter is an expert at suing for).

The stagecoach press release states the £3.3bn as £2.3bn:

http://www.stagecoach.com/media/news...014-11-27.aspx

McLoughlin on the Today Programme said £3.3bn. A Tory Minister lie to the public? Surely not.

Of course this is only a "forecast", and if you try and ask Government what the real figures are you get told that they are "commercially sensitive". Of course they are, we couldn't possibly get to hold the mandarins to account, could we.

 

[Geezertronic]

But each of those positions is a legitimate argument.

If they had agreed premiums less than or equal to DOR's profit, then it's clear the franchise would have been undersold.

But won't VTEC be able to provide more money back during the lifetime of the contract when IEP comes into service (including the extra seats that IEP will offer), when extra services are run, and if passenger numbers grow as forecast?

 

[Robertj21a]

Hmmm, interesting. I feel the same as you but we'll see. Could seriously harm Virgin's reputation if it does go the same way as the last two private companies to try and run it!

It won't, it's Stagecoach in charge.

 

[Tetchytyke]

I think the passenger growth is the key. Stagecoach, on all their other franchises, have negotiated a cap-and-collar arrangement where they get extra subsidy/less premium if passenger numbers don't rise as expected. I'll bet my bottom dollar that the same applies here, but of course the DafT mandarins will never tell us that. They'll just stick to the £2.2bn or £3.2bn figures, given that £1bn is nothing much between friends.

The Insanely Expensive Project will have higher running costs that the current trains, which will make the projections even more interesting. Maybe direct trains from Middlesbrough will stimulate passenger growth.

 

[ainsworth74]

It won't, it's Stagecoach in charge.

But it will be Virgin's name on the line. We on here will understand the difference and who is really in charge. The average punter using the trains? I doubt it...

 

[bb21]

But it will be Virgin's name on the line. We on here will understand the difference and who is really in charge. The average punter using the trains? I doubt it...

Exactly. How many average punters on the street will be able to tell that Stagecoach is behind it all? Hell, how many of them know that Stagecoach own half of Virgin Rail Group as of now?

 

[Robertj21a]

But it will be Virgin's name on the line. We on here will understand the difference and who is really in charge. The average punter using the trains? I doubt it...

That's not the point. It's Stagecoach who will be running the operation and looking after the financial side of things to ensure that the figures are achieved. The Virgin name is simply to aid marketing.

 

[sprinterguy]

That's not the point. It's Stagecoach who will be running the operation and looking after the financial side of things to ensure that the figures are achieved. The Virgin name is simply to aid marketing.

Yes, but if it is branded as Virgin Trains East Coast, who will the public (and, in all likelihood, the popular media) look to if it all goes belly up?

 

[MichaelJP59]

It might seem simplistic, but why aren't these franchises awarded as a profit sharing agreement rather than a fixed amount of premium promised (with cap/collar complications).

It seems that the bid promising the highest premium wins when the only way they can make it work is to make the passenger suffer!

 

[swt_passenger]

It might seem simplistic, but why aren't these franchises awarded as a profit sharing agreement rather than a fixed amount of premium promised (with cap/collar complications).

IIRC they dropped cap and collar with all franchises since some date or other.

 

[Blindtraveler]

Ah, a much earlier implementation than I recall (mid 1990s) I expect.

Neil
--- old post above --- --- new post below ---


Even in its new form? I think it was awful but it's now nice.

Will be interesting to see what happens to these fares when the 9-car Pendolinos (most common stock on these services) are changed to 3 first 6 standard as is planned.

Less standees and the cheepest First Advances, which often involve at least 1 split may be less easy to get. Will still use though, even if its in standard and on a combination of multiple tickes as despite its rebuild Im not a fan of KGX and the ECMLs Eurika Timetable means such sharp turnrounds on many turns that 1 small problem can easily become a big farse! ↲

Not only that but I almost always want the Vic or Northern so if I can use a tube station thats less busy and save 30 or 40 quid return in the process esp as im often on the Caly in 1 direction with a split ticket at Crewe, Preston or Carlisle then its a multiple win that compensates for the extra 1h20 roughly in extra travel time! Sorry, Off Topic

 

[LNW-GW Joint]

I think the passenger growth is the key. Stagecoach, on all their other franchises, have negotiated a cap-and-collar arrangement where they get extra subsidy/less premium if passenger numbers don't rise as expected. I'll bet my bottom dollar that the same applies here, but of course the DafT mandarins will never tell us that. They'll just stick to the £2.2bn or £3.2bn figures, given that £1bn is nothing much between friends.

Cap and collar is dead with these new franchises.
Instead there is some formula linked to GDP growth (or is it inflation?).
ie there is no fixed revenue target.

 

[Robertj21a]

Yes, but if it is branded as Virgin Trains East Coast, who will the public (and, in all likelihood, the popular media) look to if it all goes belly up?

Brian Souter is a very astute chap. Running Stagecoach he will know that his organisation can handle all of the key issues involved - but, even so, if it should go 'belly-up' then it's Virgin who will get the media attention/blame !!.

However, my whole point is that it's Stagecoach - so it won't go 'belly-up'.

 

[northwichcat]

Brian Souter is a very astute chap. Running Stagecoach he will know that his organisation can handle all of the key issues involved - but, even so, if it should go 'belly-up' then it's Virgin who will get the media attention/blame !!.

However, my whole point is that it's Stagecoach - so it won't go 'belly-up'.

Virgin will have strict conditions on how the franchise can be run if the Virgin brand name is to be used. If it did start to go 'belly up' I imagine Virgin would claim a breach of conditions by Stagecoach and not continue to allow the franchise to run under the Virgin name.

 

[Aictos]

Just one point, I know the brand name Virgin Trains East Coast has been mentioned many time but surely they would just brand it as Virgin Trains like they did when they had both the West Coast IC and Cross Country IC operations when they ran services under the Virgin Trains brand even though they were two separate TOCs.

Secondly I thought the successful bidder would have to use the current DfT specified livery with the winning bidder's name replacing East Coast or is that no longer a DfT directive?

 

[PG]

Hopefully they can come up with a better abbreviation than VTEC .... many people will think its a train with a Honda engine - or maybe thats just me

 

[Bletchleyite]

Just one point, I know the brand name Virgin Trains East Coast has been mentioned many time but surely they would just brand it as Virgin Trains like they did when they had both the West Coast IC and Cross Country IC operations when they ran services under the Virgin Trains brand even though they were two separate TOCs.

But in that case VXC and VWC had the same ownership. East Coast won't have.

I do wonder if the current VT will be renamed and rebranded to Virgin Trains West Coast, though.

Secondly I thought the successful bidder would have to use the current DfT specified livery with the winning bidder's name replacing East Coast or is that no longer a DfT directive?

It never was. They can choose between retaining the branding, changing it but paying for it to be changed back[1] at the end, or providing the branding they do use (at a nominal fee?) to the next franchisee.

[1] They started doing that for VWC, I think, even though it is a different franchise structure - this is why Warrington Bank Quay was debranded and has BR-style signage and very little red paint.

Neil

 

[aylesbury]

Surely the franchise name has been set by Daft and cannot be changed as has the colours of trains .

 

[LNW-GW Joint]

You won't find any mention of Virgin Trains East Coast on the web sites of either Virgin Trains or Virgin Rail Group, which are creatures of the 51/49% split between Virgin and Stagecoach.
All the statements have so far come from corporate-level sources.
Maybe some wider rebranding is coming up, but I think there might be considerable separation between the two franchises operationally.
It will be interesting which combination bids for the next West Coast franchise in 2016 - probably the 90/10 split I think.

There are a few places where the two franchises are neighbours - London and Glasgow/Edinburgh.
It will be interesting to see how much cooperation there is on the ground - lounges, crewing, maintenance, uniforms, ticket validity etc.
But again, the DfT does not encourage sharing of resources as it makes the finances harder to separate.
Another question - will VTEC introduce the off-peak railcard easement that applies on West Coast (and is very valuable to people like me!)?
Again, I think probably not. It might not survive into the new WC franchise either.

 

[Robertj21a]

You won't find any mention of Virgin Trains East Coast on the web sites of either Virgin Trains or Virgin Rail Group, which are creatures of the 51/49% split between Virgin and Stagecoach.
All the statements have so far come from corporate-level sources.
Maybe some wider rebranding is coming up, but I think there might be considerable separation between the two franchises operationally.
It will be interesting which combination bids for the next West Coast franchise in 2016 - probably the 90/10 split I think.

There are a few places where the two franchises are neighbours - London and Glasgow/Edinburgh.
It will be interesting to see how much cooperation there is on the ground - lounges, crewing, maintenance, uniforms, ticket validity etc.
But again, the DfT does not encourage sharing of resources as it makes the finances harder to separate.
Another question - will VTEC introduce the off-peak railcard easement that applies on West Coast (and is very valuable to people like me!)?
Again, I think probably not. It might not survive into the new WC franchise either.

I'd never even thought that there would be anything other than separate operations - after all, WCML is majority owned by Virgin whereas ECML will be majority owned by Stagecoach.

Why do people keep suggesting that they're both Virgin operations when they aren't ?

 

[BananaRepublic]

But in that case VXC and VWC had the same ownership. East Coast won't have.

I do wonder if the current VT will be renamed and rebranded to Virgin Trains West Coast, though.

Just for clarity on the names; both TOC operations run by Virgin/Stagecoach up to now are/were branded Virgin Trains. However....

The company running the West Coast operation is Virgin West Coast Trains Ltd;
VXC were Virgin CrossCountry Trains Ltd.
Both are/were subsidiaries of the Virgin Rail Group (Virgin 51%, Stagecoach 49%).

The East Coast franchise has been won by a different group altogether; Inter City Railways ltd (Stagecoach 90%, Virgin 10%).
As far as I can tell, this is not part of the Virgin Rail Group, even though the joint partners are the same.
As we know, the announcement includes reference to the branding being Virgin Trains East Coast.

Confused? you will be!

 

[swt_passenger]

Surely the franchise name has been set by Daft and cannot be changed as has the colours of trains .

The DfT's name for a franchise is not usually the same as the public name.

DfT 'Essex Thameside' is c2c.
DfT 'TSGN' is known by the franchisee as 'GTR'

The colour of trains is not specified by DfT - despite regular posts suggesting it is, no-one has ever found any evidence that it is a formal rule...

 

[bb21]

Just for clarity on the names; both TOC operations run by Virgin/Stagecoach up to now are/were branded Virgin Trains. However....

The company running the West Coast operation is Virgin West Coast Trains Ltd;
VXC were Virgin CrossCountry Trains Ltd.
Both are/were subsidiaries of the Virgin Rail Group (Virgin 51%, Stagecoach 49%).

The East Coast franchise has been won by a different group altogether; Inter City Railways ltd (Stagecoach 90%, Virgin 10%).
As far as I can tell, this is not part of the Virgin Rail Group, even though the joint partners are the same.
As we know, the announcement includes reference to the branding being Virgin Trains East Coast.

Confused? you will be!

I think if East Coast were to be branded as such, it can cause confusion if West Coast were not suitably rebranded.

Imagine someone asking, "When will the next Virgin service to London be"? Most passengers will likely refer to both as Virgin Trains, whether "East Coast" is appended to the end or not. While East Coast can be easily identified, how do you identify a West Coast service to an average punter without making that explicit?

 

[thenorthern]

Just for clarity on the names; both TOC operations run by Virgin/Stagecoach up to now are/were branded Virgin Trains. However....

The company running the West Coast operation is Virgin West Coast Trains Ltd;
VXC were Virgin CrossCountry Trains Ltd.
Both are/were subsidiaries of the Virgin Rail Group (Virgin 51%, Stagecoach 49%).

The East Coast franchise has been won by a different group altogether; Inter City Railways ltd (Stagecoach 90%, Virgin 10%).
As far as I can tell, this is not part of the Virgin Rail Group, even though the joint partners are the same.
As we know, the announcement includes reference to the branding being Virgin Trains East Coast.

Confused? you will be!

With Virgin Cross Country and Virgin West Coast many of the lines were in a way interconnected with each other such as both of them ran up the West Coast Mainline to Scotland both of them ran into Manchester and both of them had Birmingham New Street as a major stop which in my opinion having them both operating under one brand made it much easier.

With East Coast and West Coast there isn't the same interconnectivity there as there was with West Coast and Cross Country so I don't think it could work the same but who knows if they will both operate under the Virgin Trains Brand.

 

[jon0844]

Hmmm, interesting. I feel the same as you but we'll see. Could seriously harm Virgin's reputation if it does go the same way as the last two private companies to try and run it!

You'll know it's going tits up when Virgin pulls out of the venture and the Virgin branding disappears overnight.

 

[yorksrob]

SuperApex returns were utterly useless unless you booked months in advance, because they had to be available on both trains - I'm not sure I ever successfully obtained one. Modern "Advance" tickets, modelled on the Virgin Value Singles, are much more useful.

Neil

I remember using them to travel quite long distances in the late 90's and early 00's. They were a darn sight more flexible than booking advance.