RMweb Gold roundhouse Posted August 20, 2012 RMweb Gold Share Posted August 20, 2012 At what point do the Competition Commision get interested? Mike Wiltshire Well they certainly wont now be looking into First bus operation in North Devon!! Link to post Share on other sites More sharing options...
Ron Ron Ron Posted August 21, 2012 Share Posted August 21, 2012 The announcement that Virgin Atlantic (half owned by Singapore Airlines and nothing to do with Virgin Trains) are planning to start some short haul services into Heathrow, is nothing whatsoever to do with the loss of the WCML franchise. Rumours and stories about this were circulating as far back as April, long before last week's WCML announcement. The reason for this is quite simple. It has been reported that up to 25% of Virgin's Heathrow passengers are fed through the airport on connecting flights to/from UK regional airports and some European cities. Many of those passengers (particularly on domestic flights) have been supplied by BMI. BMI are being taken over by BA and their services will be absorbed into BA or scrapped. BA are required to give up a proportion of the BMI Heathrow landing slots as a result of the takeover and these will be sold off to other airlines. With the cessation of BMI's Heathrow - Manchester flights, BA will remain as the only operator on this route. BA will have an advantage in feeding lucrative business traffic to/from Manchester through Heathrow T5 and onto its own worldwide network, particularly where BA compete with Virgin on long-haul. Virgin intend to obtain some of the spare Heathrow slots now up for grabs, with the intention of protecting (and growing) their income from connecting passengers travelling to/from regional airports, otherwise it will be lost to competitors such as BA. Manchester has been chosen as their first destination. In summary, the proposed Virgin flights are principally in competition with BA and not First WC (or whatever they'll be called). . Link to post Share on other sites More sharing options...
Mod3 Posted August 21, 2012 Share Posted August 21, 2012 Serious question, that one by the way..... But not one for this topic please. Link to post Share on other sites More sharing options...
Coach bogie Posted August 21, 2012 Share Posted August 21, 2012 In summary, the proposed Virgin flights are principally in competition with BA and not First WC (or whatever they'll be called). Totally agree with initial reasons. My periods in Aberdeen and the North East, I now use Schipol as a hub as the UK internal flights are a joke but do you actually believe Virgin are not going to use this as an opportunity to devalue FG on the Manchester-London route? And how many of the 25% Heathrow dissaatisfied customers used Virgin trains as the start of their international journey? I know people in Liverpool, Manchester and Warrington who have done so for many years. Mike Wiltshire Link to post Share on other sites More sharing options...
Supaned Posted August 21, 2012 Share Posted August 21, 2012 If Virgin were so bothered about providing a feeder service from Manchester to Heathrow , why did they not offer it via a Pendolino in the first place? I know that Lufthansa code share with DB on certain routes , and your flight turns out being an ICE train. Yes , I know that it's not possible for a Pendolino to go to Heathrow , but they do go from Manchester to London. I see the business logic of them starting these feeder flights , but it could be argued that the timing of the announcement is somewhat questionable.... Link to post Share on other sites More sharing options...
Ron Ron Ron Posted August 21, 2012 Share Posted August 21, 2012 .....do you actually believe Virgin are not going to use this as an opportunity to devalue FG on the Manchester-London route? Mike, the press seem to be doing this already; but as I said earlier, this is nothing to do with the WCML. More of a coincidence in the timing of the two pieces of news (WCML franchise and Virgin Atlantic announcements). Virgin Atlantic have been planning this for some time and there was a fair bit of talk about it as far back as April and May. The majority of air passengers on this route are interlining (connecting) through Heathrow and most of the remainder are destined for West London, the Thames Valley and other points in the SE. It's a different market than that served by the rail services to Euston. And how many of the 25% Heathrow dissaatisfied customers used Virgin trains as the start of their international journey? I know people in Liverpool, Manchester and Warrington who have done so for many years. Sorry, "dissatisfied customers" ??? Where did that come from? The figure I repeated in my previous post, was that 25% of Virgin's passengers at Heathrow are said to be connecting passengers. Many flying in from Manchester and other cities to connect onto Virgin Atlantic flights. This is quite common as Heathrow is a major hub airport and has a large percentage of connecting traffic. For example, a large part of BA's business involves connecting passenger traffic through this airport. Many of Virgin's connecting passengers have been flying with BMI. BMI ceases to exist in the very near future. BA have a near monopoly on all Heathrow domestic services connecting into international flights and stand to cream off much of Virgin Atlantic's business. Hence the announcement of Virgin Atlantic introducing some domestic flights. As for passengers travelling by rail from the NW to Heathrow. It's a very small percentage of Heathrow passengers. The annual official passenger survey has been fairly constant in this regard over the years. Only 0.8% of Heathrow passengers terminating at Heathrow (not connecting via domestic flights) are travelling to/from the NW by surface transport (approx. 320,000 pax in 2010). Of these the mode of transport is split roughly 50/50 between public and private means. i.e. less than half of one percent of the total number of Heathrow passengers are travelling from the NW by public transport. It's a much smaller figure for Scotland, where only 0.2% of passengers using Heathrow, have travelled to/from Scotland by surface transport. . Link to post Share on other sites More sharing options...
Fat Controller Posted August 21, 2012 Share Posted August 21, 2012 To put this into some sort of perspective, the three daily flights (which was the service I heard discussed on R4 this morning, I believe) is equivalent to the capacity of about one Pendolino; hardly a huge impact on the existing rail market. Link to post Share on other sites More sharing options...
Ron Ron Ron Posted August 21, 2012 Share Posted August 21, 2012 If Virgin were so bothered about providing a feeder service from Manchester to Heathrow , why did they not offer it via a Pendolino in the first place? Completely different companies, with different ownership, despite the Virgin branding. In any event, Manchester - Euston is of little use for getting to Heathrow. Virgin already had the feeder services, provided by BMI. The BA takeover of BMI has removed those feeder services, so Virgin Atlantic have decided to replace them with their own flights out of necessity. I know that Lufthansa code share with DB on certain routes , and your flight turns out being an ICE train. Yes , I know that it's not possible for a Pendolino to go to Heathrow , but they do go from Manchester to London. Frankfurt Airport has very good railway links with its own station. There are local, suburban, regional and inter-city rail services all serving the airport. Heathrow is only served from London itself and then only on two routes (surface to Paddington and the Piccadilly Underground line). You've answered your own question. Euston is nowhere near Heathrow and it requires a convoluted series of journeys to make a connection to the airport. I see the business logic of them starting these feeder flights , but it could be argued that the timing of the announcement is somewhat questionable.... Possibly so, but the news was already out a few months ago. Who's making mischief here, Virgin or the press ? It is the newspaper "silly season" after all. . Link to post Share on other sites More sharing options...
Ron Ron Ron Posted August 21, 2012 Share Posted August 21, 2012 To put this into some sort of perspective, the three daily flights (which was the service I heard discussed on R4 this morning, I believe) is equivalent to the capacity of about one Pendolino; hardly a huge impact on the existing rail market. Brian, it shouldn't have any impact on the rail market as these flights are simply replacing some BMI ones. There are now only six BMI flights per day, of which 3 are duplicating similar timings to BA flights. If those three duplicate BMI flights are dropped when the merger is complete (the other 3 becoming BA flights), then Virgin will simply be replacing the capacity lost by those 3 flights. The rail and air markets between London and Manchester are largely completely different. . Link to post Share on other sites More sharing options...
Horsetan Posted August 21, 2012 Share Posted August 21, 2012 When First group own the airlines, and the long distance coach companies, and have won the franchise to operate your car? Oh God, not another G4S! Link to post Share on other sites More sharing options...
34theletterbetweenB&D Posted August 21, 2012 Share Posted August 21, 2012 Not so much G4S-like as RBS-like. I feel the strategy may be an attempt to become 'too big to fail'. If it works for financial freeloaders, why not for other industries that actually do a useful job of work? Link to post Share on other sites More sharing options...
Glorious NSE Posted August 21, 2012 Share Posted August 21, 2012 I'm personally quite shocked at the amount of fuss created over this decision , and that the fuss created in certain quarters seems to have triggered enquiries. I don't recall this happening for any other franchise decision , no matter how controversial , so will this now set a precedent if the incumbent franchisee looses theirs and stamps and huffs and puffs and has a media slanging match? I think it's kinda funny how the mood changes as well as what the perception of 'the right thing' is. Two weeks ago we were on top of the world, Britain was a great country, our companys and organisations could go places, we could do anything, we were at least as good a place as anywhere you'd care to pick on this globe and yes we even had a public transport system that was worth mentioning positively on a global stage! Two weeks on... * One company makes a brave move and 'bets the farm' on future growth. It's a big gamble. UK Rail is their biggest market, they have debt to service, should they be stripped of this and their other franchises (which is what we are told will happen) then whether they can continue to trade at all is brought into question. * Another company we are told predicts there is no growth to be had - despite growth being pretty much continual from the 80s to the present, despite there having been huge growth (limited by capacity we are told,) despite a major fleet capacity increase which is just kicking off (and both companies involved have factored in making another capacity jump in 4 years time) - despite this franchise being the fastest way by far between many of Britain's largest cities, and despite NR making changes almost constantly to manage demand... It seems to have been somewhat hidden by the bluster of the loser, but the thing i'm most surprised about is that nobody seems to be moaning about how unambitious Virgin's bid seems to have been (assuming the reports are correct) - if they had won on the basis of no growth on a route like this then my cynical mind suggests what they were after was simply a license to print money at the taxpayers expense. Will First succeed? I don't honestly know, but I hope they do. They may have bet their whole company on this continuing to be a growth industry, not a stagnant one. Link to post Share on other sites More sharing options...
Katier Posted August 21, 2012 Share Posted August 21, 2012 It seems to have been somewhat hidden by the bluster of the loser, but the thing i'm most surprised about is that nobody seems to be moaning about how unambitious Virgin's bid seems to have been (assuming the reports are correct) - if they had won on the basis of no growth on a route like this then my cynical mind suggests what they were after was simply a license to print money at the taxpayers expense. Problem is there is a limit to the rate of growth. I liken it to the .com boom.. at some point the bubble is going to burst. First think it won't for another 15 years, Virgin predict a plateau fairly soon. Given the fact that key stations are close to, if not at or past capacity ( Leeds being a case in point I believe, New St another, Snow hill another ) it has to plateau at some point because you can bring in all the trains you want, but if you don't have the rail lines to run it on in the right place.. your stuffed. Link to post Share on other sites More sharing options...
RMweb Gold The Stationmaster Posted August 21, 2012 RMweb Gold Share Posted August 21, 2012 Problem is there is a limit to the rate of growth. I liken it to the .com boom.. at some point the bubble is going to burst. First think it won't for another 15 years, Virgin predict a plateau fairly soon. Given the fact that key stations are close to, if not at or past capacity ( Leeds being a case in point I believe, New St another, Snow hill another ) it has to plateau at some point because you can bring in all the trains you want, but if you don't have the rail lines to run it on in the right place.. your stuffed. I'm not sure it would work quite like that. On many routes outside London (but also in the London area as well) the limit on capacity is the size of the trains - there are an awful lot of 14X units out there and a lot of 15X units with some short formations in relation to the number of passengers already wishing to travel. So it is not so much network capacity stifling growth (and a lot of that is in any case being enhanced) as it is the number of seats on which to place the bums or with which to increase frequency. True there are in some cases pinch points at places where passengers circulate at the larger stations (at Leeds it's the barriers for example) but very often 'problems' such as those can be solved or mitigated with a spot of creative thinking. Link to post Share on other sites More sharing options...
Ohmisterporter Posted August 21, 2012 Share Posted August 21, 2012 If Virgin had included in their renewal bid a statement that there is plenty of room for growth, and a travelling public crying out for new services from hitherto untapped population centres, that would surely raise the question, "Why did you do nothing about this when you had the franchise?" It is in the interest of all franchise operators to keep some cards up their sleeve until it comes to franchise renewal time. Then "Hey presto!" new routes and revenue sources can be tapped. This is why we do not have an evenly spread top class service, it is not in the interest of the TOCs to provide it today, there always has to be jam tomorrow. Link to post Share on other sites More sharing options...
Glorious NSE Posted August 21, 2012 Share Posted August 21, 2012 It is in the interest of all franchise operators to keep some cards up their sleeve until it comes to franchise renewal time. Then "Hey presto!" If that's the case, it would seem they mistimed things a little! Link to post Share on other sites More sharing options...
RMweb Gold JohnR Posted August 21, 2012 RMweb Gold Share Posted August 21, 2012 In terms of growth, an interesting statistic I read today was that when you add up all the seats flying up and down the west coast, the seats are only occupied an average of 37%... it wont take many extra bums filling those empty seats to get some good growth numbers... The next question is of course why are we extending the 390's to 11-car... well, of course there are some services which are very crowded, and the flip side being there must be some which are very empty.... Link to post Share on other sites More sharing options...
Ohmisterporter Posted August 21, 2012 Share Posted August 21, 2012 In terms of growth, an interesting statistic I read today was that when you add up all the seats flying up and down the west coast, the seats are only occupied an average of 37%... it wont take many extra bums filling those empty seats to get some good growth numbers... The next question is of course why are we extending the 390's to 11-car... well, of course there are some services which are very crowded, and the flip side being there must be some which are very empty.... Which is the problem faced by commuter lines. Busy peaks and quiet troughs that are not easy to fill. Railway administrators have over a century of experience tackling this problem. Not many have succeeded. Link to post Share on other sites More sharing options...
scorpion Posted August 21, 2012 Share Posted August 21, 2012 yep, travelled around west yorkshire today on a day rover, Leeds is supposedly bursting at the seems but from 1pm to 5pm i saw 3 and 4 car units running with maybe a dozen passengers per carriage and some stations where a handful of passengers joined Link to post Share on other sites More sharing options...
Lochnagar Posted August 21, 2012 Share Posted August 21, 2012 I haven't had time to read the comments here, but my opinion is that losing Virgin to First group is a huge mistake with an unrealistic bid. Virgin trains is an iconic british brand an should have been kept, especially as they're doing a pretty good job anyway. I hear Mr Branson has bought BMI and is planning to operate a very competitive flight alternative which is quite amusing! Link to post Share on other sites More sharing options...
Red Baron Posted August 21, 2012 Share Posted August 21, 2012 Sadly this will pan out to be a cock up of monumental proportions.... First are not going to deliver anything like the service Virgin have done / do. (As someone who has used FGW and Virgin for prob 100 journeys this year I feel well placed to comment. It is all about mentality of mgmt... one runs buses to an avg standard and falls out with the unions... one runs airliners to an exceptional standard with flair. I for one will be using whatevewr option Virgin come up with assuming they secure the heathrow slots required ( BA have to give them up as they have bought out BMI - Virgin have not bought BMI! ) Link to post Share on other sites More sharing options...
Ron Ron Ron Posted August 21, 2012 Share Posted August 21, 2012 I hear Mr Branson has bought BMI and is planning to operate a very competitive flight alternative which is quite amusing! BMI are now owned by BA, not Virgin. If you read previous comments in this thread, you'll see that this has nothing to do with the WCML or any alternative to rail travel. . Link to post Share on other sites More sharing options...
Talltim Posted August 21, 2012 Share Posted August 21, 2012 It is all about mentality of mgmt... one runs buses to an avg standard and falls out with the unions... one runs airliners to an exceptional standard with flair. I thought one was pulling out of buses and winning lots of rail franchises and the other used to make and sell records and is now a broadband provider Link to post Share on other sites More sharing options...
Red Baron Posted August 21, 2012 Share Posted August 21, 2012 I thought one was pulling out of buses and winning lots of rail franchises and the other used to make and sell records and is now a broadband provider which is a bit like microsoft make mice and lamborghini make tractors.... Link to post Share on other sites More sharing options...
RMweb Gold JohnR Posted August 21, 2012 RMweb Gold Share Posted August 21, 2012 It is all about mentality of mgmt... one runs buses to an avg standard and falls out with the unions... one runs airliners to an exceptional standard with flair. Errr, its Virgin who dont get on with the unions, not First. Virgin regularly threaten staff with the sack for trying to organise. TSSA and RMT have been very vocal campaigning against them for this blatant abuse of the employment laws. But then thats in line with Branson's well known views on Trade Unions. As opposed to Tim O'Toole's, (MD of First Group, and previously MD of TfL) who managed to work with the unions while at London Transport to reduce the level of industrial action to their lowest levels for decades.... Link to post Share on other sites More sharing options...
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