"FirstGroup ...... frontrunner for west coast rail franchise"

[JohnR]

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.

.

 

It might not be anything to do with the WCML, but its given First a great reason for not hitting their targets....

[woodenhead]

The question of growth is an interesting one - since Virgin got the first franchise there have been some serious changes in business culture and a more recently a big push to move Civil Service and state owned media out to the regions.

 

The change in culture away from face to face over to webinar/teleconferencing will have had a big impact, in my previous company I rarely needed to travel with most meetings conducted via conferencing, I was even able to do remote IT work without leaving my desk. We weren't the only people doing this so it will have dampened demand for travel. On the flipside, re-located Civil Service/BBC departments are being located near to high speed routes to allow fast travel to/from London - Mayfield in Manchester is earmarked for redevelopment as a huge Civil Service office hub right next to Piccadilly.

 

Perhaps Virgin were basing flat growth on the increasing use of technology to avoid travel versus the lead time to new opportunities borne out of Governmental relocations. Massive growth can't come purely from off peak leisure travel during the week can it?

[Coach bogie]

 

Sorry, "dissatisfied customers" ??? Where did that come from?

 

 

 

I was referring to your point

 

'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'

 

I had seen this at one of the press releases at FIA. The point still stands, and although I do not have exact stats, Heathrow passengers from Liverpool/Manchester do use Virgin trains to get to the airport. I mentioned previously that I abandoned Heathrow as a hub and use Schipol, many years ago for exactly this reason.

 

But one quote from this morning broadsheets says it all:-

'The Virgin announcement is unconnected to the loss of the rail franchise – though if it triggers a price war on the key London-Manchester route, travellers may be tempted from trains to planes. The lowest Virgin fare saves £200 on a full-fare train ticket between the two cities.'

 

With frequent cheap trains to Manchester Airport, there wilbe a serious challenge to the ex Virgin train service.

 

Time will tell - and there is still time for a Government U turn.

 

Mike Wiltshire

[AndrewC]

The question of growth is an interesting one - since Virgin got the first franchise there have been some serious changes in business culture and a more recently a big push to move Civil Service and state owned media out to the regions.

 

The change in culture away from face to face over to webinar/teleconferencing will have had a big impact, in my previous company I rarely needed to travel with most meetings conducted via conferencing, I was even able to do remote IT work without leaving my desk. We weren't the only people doing this so it will have dampened demand for travel. On the flipside, re-located Civil Service/BBC departments are being located near to high speed routes to allow fast travel to/from London - Mayfield in Manchester is earmarked for redevelopment as a huge Civil Service office hub right next to Piccadilly.

 

Perhaps Virgin were basing flat growth on the increasing use of technology to avoid travel versus the lead time to new opportunities borne out of Governmental relocations. Massive growth can't come purely from off peak leisure travel during the week can it?

Pretty much what I said a few pages back. However, there are programmes in development to reduce government travel and increase remote working. That's about all I can say at the moment.

[Supaned]

 

 

Time will tell - and there is still time for a Government U turn.

 

 

I still maintain that a Government U-turn on a franchise award sets a precedent , meaning any future franchise decisions could be contested if one of the unsuccessful bidders doesn't like the decision going against them. The costs of such appeals would only add more waste to the industry , just what it doesn't need.

[Glorious NSE]

Okay. Lets look at some other stuff...

 

* Virgin bid alledgedly 'no growth'

* Keep in mind we have a route that we are told is nearly full of trains, with demand being hit by lack of capacity and predicted growth in demand for train paths sufficient to demand a new route in the near future.

* 4 new 11 car Pendo sets just added to the fleet (okay, one of them replaces the Grayrigg set)

* About 2/3rds of the fleet being changed from 9 to 11 cars (about 150 extra seats in the present config?) - 439 to 589 per train is a big jump in capacity already.

* Alstom reckon in the refurb they could get that up to 667 seats 'in comfort' (source, MR e-preview out yesterday) - a big jump up from todays 439 on most trains!

* Against that huge jump in capacity we have a further one to come in 2016...

* Rail still does not have market share on some obvious markets (like Birmingham-London) i'm told, so the customers are potentially out there, sat on the M1/M40...

 

Looks like lots of opportunity for growth to me, they have the capacity there to add more than a third to the size of the business, the market i'm told is there for it too.

 

And thinking last night, the money side isn't quite as daunting as the figures first sound...time for sum (sorry) crunching...

[Glorious NSE]

Repayments per annum

Year Ending £m

Mar 2013 (4 month of franchise) - (11)

Mar 2014 - 26

Mar 2015 - 106

Mar 2016 - 178

Mar 2017 - 265

Mar 2018 - 325

Mar 2019 - 390

Mar 2020 - 443

Mar 2021 - 498

Mar 2022 - 552

Mar 2023 - 602

Mar 2024 - 644

Mar 2025 - 697

Mar 2026 - 739

 

Total £5.4bn....

 

Looks scary doesn't it - that £739m - a little over £2m a day - but £739m won't be worth £739m by 2026...assuming 3% inflation per year you can knock a third of the value off that...I reckon £4.2bn is closer to the real cost, or put it another way, 20% of the £5.4bn will get taken out of the equation by inflation...

 

So - lots of opportunity plus not quite as scary numbers as folk are saying?

[Ron Ron Ron]

Sorry, "dissatisfied customers" ??? Where did that come from?

I was referring to your point

 

'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'

 

I'm sorry Mike. I completely fail to see what the term "dissatisfied customers" has to do with the point I made?

Who is dissatisfied and what are they dissatisfied with ? What has it got to do with the topic?

 

As with many airlines flying from Heathrow (same applies at other hubs like Schiphol), a sizeable proportion of Virgins passengers are flying to/from other UK or mainland European originating/destination points and connecting onto long-haul services via Heathrow.

25% of Virgin Atlantic passengers passing through Heathrow fall into this category.

Levels of customer satisfaction are not alluded to in any part of that statement.

 

 

.....Heathrow passengers from Liverpool/Manchester do use Virgin trains to get to the airport. I mentioned previously that I abandoned Heathrow as a hub and use Schipol, many years ago for exactly this reason.

 

You decided to use Schiphol, because people are using the train to get to Heathrow ????

Is this some form of private protest ?

 

As for using Schiphol, or any other alternative European mainland hub such as Frankfurt or Paris; yes they are much more convenient airports to get to (and connect through) for many people living in the various regions of the UK.

There are frequent flights from many regional airports to these hubs and the airport terminals are set up well for easy connections to other flights.

 

Compare that with trying to get to Heathrow from many parts of the UK outside of the SE of England.

Domestic flights are restricted to just a handful of main cities (except Birmingham, which has always been too close for air services) and alternative surface transport options, very poor.

Once you get there, Heathrow has been plagued by the scattered terminal arrangements, meaning inter-terminal connections can be long winded, time consuming and inconvenient, particularly for those on a tight schedule or laden with heavy baggage.

On the other hand, Schiphol has more flights to more destinations in the UK, than the number of domestic flights between Heathrow and other UK airports.

 

Heathrow and BA in particular, are fighting back. BA passengers now connect through a single terminal - T5 and two of the central area terminals (T1 & 2) are being replaced by a large new single terminal, designed with connecting between flights in mind.

 

 

But one quote from this morning broadsheets says it all:-

'The Virgin announcement is unconnected to the loss of the rail franchise – though if it triggers a price war on the key London-Manchester route, travellers may be tempted from trains to planes. The lowest Virgin fare saves £200 on a full-fare train ticket between the two cities.'

 

With frequent cheap trains to Manchester Airport, there wilbe a serious challenge to the ex Virgin train service.

 

This could be put down to the press having a convenient storyline to run. Coincidence is a very useful tool for journalists.

On the other hand, using air travel rather than rail is much more convenient if your ultimate destination suits it.

If your destination is the Thames Valley (lots of businesses and UK corporate HQ's) or West London; flying may be the best option.

When my Father worked, he sometimes had to travel from Cheshire to outer SW London or Surrey. Flying from Manchester to Heathrow and then either being collected from the airport or getting a taxi, saved him several hours and meant he could comfortably do a return trip in a day and have more time at the "other end", so to speak.

 

As for Virgin Atlantic getting into this market; the prime reason is more to do with winning passengers for Virgin Atlantic and Singapore Airlines services out of Heathrow (n.b. Virgin Atlantic is half owned by Singapore AL).

Amongst the competition, BA can provide a single terminal connection at T5 and Emirates are creaming off a large number of passengers travelling from Manchester and the NW, destined for the Far East, SE Asia, India and Australia. via their huge hub in Dubai.

 

 

 

.

[Ron Ron Ron]

...Looks like lots of opportunity for growth to me, they have the capacity there to add more than a third to the size of the business, the market i'm told is there for it too.

 

Good points Martyn, However it's one thing to provide extra capacity, but quite another to put bums in seats.

 

We've seen incredible growth in all rail travel over the last 15 years and since the WCML upgrade, introduction of the Pendolino's and the adoption of the VHF timetable, WCML passenger numbers have grown to almost 2 and a half times the level when Virgin took on the original franchise.

Whilst growth will surely continue, there isn't unlimited scope for it to increase at the rate seen in the last decade. Near market saturation will occur at some point.

 

How much demand is there for more travel than occurs already and how much more business can be stimulated by promotions and marketing, rather than just abstracting revenue from other types of fare ?

After all, First are basing their figures on a steady increase in fares as much as on carrying extra passengers.

 

 

.

[Glorious NSE]

Near market saturation will occur at some point.

 

The question is whether that point happens now - and my suspicion is that it doesn't, at least not because a beardy chap says it is so.

 

The data from HS2 suggests that 73% of journeys between London and the West Midlands, and 49% of journeys between London and the North West are by car - that's a huge potential for rail to grow it's share even if the whole travel market does not grow.

http://www.hs2.org.uk/assets/x/55872

[newbryford]

 

 

But one quote from this morning broadsheets says it all:-

'The Virgin announcement is unconnected to the loss of the rail franchise – though if it triggers a price war on the key London-Manchester route, travellers may be tempted from trains to planes. The lowest Virgin fare saves £200 on a full-fare train ticket between the two cities.'

 

 

 

 

But how much does the lowest Virgin fare compare to the lowest rail fare? I wonder how much the highest Virgin fare compares with the full-fare rail ticket?

 

And then add-on the cost of city-airport travel to make it a true comparison.

 

Another classic case of the media twisting the figures.

 

Personally, my WCML travel experiences have been good and any incidents have been entirely out of VT's control.

 

Cheers,

Mick

 

Cheers,

Mick

[Kris]

But how much does the lowest Virgin fare compare to the lowest rail fare? I wonder how much the highest Virgin fare compares with the full-fare rail ticket?

 

Lowest rail fair return = £30

Any time standard return = £296

[newbryford]

Lowest rail fair return = £30

Any time standard return = £296

 

Not quite what I was after (I probably confused the issue by using Virgin - maybe I should've used Virgin Airlines)

 

The comparison should be lowest rail fare v lowest air fare.

and similarly for anytime standard return v open return air fare.

 

 

Cheers,

Mick

[Kris]

Lowest fair for the airline must be about £96 given the newspapers figures. The full list of fares is not showing on VA's website. You can't buy them there until the 29th August.

based on the assumption that the airlines cheapest fair is £96 then going by rail is less than a 3rd of the price for this journey.

[The Stationmaster]

But how much does the lowest Virgin fare compare to the lowest rail fare? I wonder how much the highest Virgin fare compares with the full-fare rail ticket?

And then add-on the cost of city-airport travel to make it a true comparison

Another classic case of the media twisting the figures.

 

Personally, my WCML travel experiences have been good and any incidents have been entirely out of VT's control.

Cheers,

Mick

 

Interestingly Ben A's report in the BBC evening (18.00) news yesterday was very clear that it is not air competing with rail, the re-edited version of his piece broadcast in the 2.00 BBC news left out the clarity of that point and was edited in a different way so you could read in an implication that it could be connected. Alas many folk will do exactly that and be misled on a clear piece of journalism by some poor BBC editing (nothing new there then).

 

As far as problems/delays during a journey are concerned it doesn't matter to most passengers who is responsible for them - they will put it down to 'the railway' and that also means they will put it firmly at the door of the part of the railway on whose train they are sitting. If Virgin are considered 'reliable' on the WCML then any other operator using the same train fleet maintained to the same or better standard will also be considered 'reliable' in similar circumstances.

 

The advantage Virgin has (seen to some extent in this thread I would suggest ) is its public perception as a brand and the public perception of Branson as a super entrepreneur who cares about customer service. Perception - be it good or poor - can be a hard thing to dispel but I would suggest there are many in the railway industry who will be glad to see the back of that name and there are many in the airline industry who do not want to, or can't afford to, work for 'his' (49% foreign owned) airline which is well known for paying poorer wages than its competitors. I'm sorry but the bloke long ago ceased to impress me with his salesmanship and self-promotion because I saw how in one situation when positive action was required his marketing 'bright ideas' were in reality no brighter or cleverer than those from anybody else while his team's ideas on 'customer service' were far worse than those of others. Just because he's going don't assume WCML will be any the worse for it - in my direct travelling experience XC definitely isn't.

 

So let's just sit back and see if First deliver on their commitments to the WCML franchise.

[Katier]

Just because he's going don't assume WCML will be any the worse for it - in my direct travelling experience XC definitely isn't.

 

I beg to differ, XC isn't bad by any means but the simple fact they decided to cram seats in and remove tables and the shop means that XC IS a worse experience.

 

They're by no means bad, however, XC have clean enough trains, staff seem friendly enough etc. but the simple fact they condensed the seating is enough to put them below what Virgin was offering.

 

Don't get me wrong though, I'm not a Virgin fangirl, they've made plenty of mistakes and I judge companies by the service they provide. In some ways Chiltern (with their plentiful tables and free wi-fi) IMHO are marginally ahead of Virgin - for example.

[Supaned]

It's been interesting reading all the wailing and outcry , along with the campaign to reverse the DfT decision.

 

Perhaps Virgin would care to reveal the content of their bid and see how people feel then? - after all , First's bid and figures are now in the public domain. If Virgin are as good as they claim to be , there should be nothing to hide....

[JohnR]

It's been interesting reading all the wailing and outcry , along with the campaign to reverse the DfT decision.

 

Perhaps Virgin would care to reveal the content of their bid and see how people feel then? - after all , First's bid and figures are now in the public domain. If Virgin are as good as they claim to be , there should be nothing to hide....

 

Indeed, apparently, Virgin's bid involved cutting costs (ie staff) by twice as much as First's.... I wonder how the staff feel about that?

[The Stationmaster]

I beg to differ, XC isn't bad by any means but the simple fact they decided to cram seats in and remove tables and the shop means that XC IS a worse experience.

 

They're by no means bad, however, XC have clean enough trains, staff seem friendly enough etc. but the simple fact they condensed the seating is enough to put them below what Virgin was offering.

 

Don't get me wrong though, I'm not a Virgin fangirl, they've made plenty of mistakes and I judge companies by the service they provide. In some ways Chiltern (with their plentiful tables and free wi-fi) IMHO are marginally ahead of Virgin - for example.

 

Every long distance franchisee is being forced to cram in seats when renewals come up (and sometimes when they don't) and it's nothing to do with the franchisees and everything to do with DafT But as i said above I have found the on train offer with XC to be the same or better than Virgin's with the exception of what they latter were doing in the first few months after the introduction of the Voyagers.

 

And while the competitive situation is different First's takeover of Hull Trains doesn't seem to have resulted in any worsening of the on-train offer nor in any reduction of visible on-train staffing presence.

 

In the end one can only judge what one sees but it is necessary - I am sure - to allow for the impact of external pressure on the TOc franchisees.

[pete_mcfarlane]

Indeed, apparently, Virgin's bid involved cutting costs (ie staff) by twice as much as First's.... I wonder how the staff feel about that?

And the RMT, who have been happily slating First for (despite a lack of real proof) planning to cut staff.

[newbryford]

Hmmmm, 57/3's in First Barbie - could look interesting.

 

Cheers,

Mick

[Coach bogie]

 

 

You decided to use Schiphol, because people are using the train to get to Heathrow ????

Is this some form of private protest ?

 

 

 

I use Schipol as the BA feeder, from Aberdeen, is a joke with much hanging around at Heathrow compared to a KLM from Aberdeen with less than an hour transfer with a saving as much as 5 hours journey time, the same from the North East airports. If my starting point is Manchester I use the Pendo as the additional tube journey is faster then the two lots of extended check in. ABZ has thirty mins check in, a further US security check at Schipol, but as you are on a KLM- KLM transfer you get wisked to the front of the queue. In comparison, I am over the Atlantic with my chosen route compared to sitting in Heathrow using BA internals.

 

As Virgin have now extended the plan to include ABZ, I will try it out to see if there is an improvement.

 

You say 'Heathrow and BA in particular, are fighting back. BA passengers now connect through a single terminal - T5'. A colleague went via Heathrow on recently as he had to meet up with others before flying to the US. ABZ flight still put on remote, and bus to T1 and you then have to get across to T5.

 

Anyway we all have different opinions and It's time to wait and see. the contract with First does not get signed until Tuesday unless the objections are considered.

 

Intereesting times.

 

Mike Wiltshire

[Re6/6]

Much as i don't like to admit it / think it.....I reckon that First will give a better service than VT With Virgin it all seems to be about hype and marketing or rather "smoke and mirrors" whereas at least First actually do provide a pretty decent service, specially after they seem to have learnt from the debacle when they first ruin took over the Greater Western franchise

 

Not too far away from Woolmar's article in 'Rail'. Quite an eye opening piece.

[Glorious NSE]

It's been interesting reading all the wailing and outcry , along with the campaign to reverse the DfT decision.

 

Including some stuff that's well below the belt...

https://fbcdn-sphoto..._35147963_n.jpg

 

(not to mention factually incorrect in several ways...)

[AndrewC]

The group trying to reverse the decision seems to have been inspired by American political campaigning methods. Repeat a lie often enough and it becomes the "truth".

 

Had a look at the e-petition count and its over 70k. Once it hits 100k that means it gets debated in the House of Commons. If the 100k is reached before next Tues it could lead to a delay in signing the franchise contracts. I predict a s**t storm approaching and its only going to get uglier.