Stagecoach and FirstGroup to battle on East Coast

Passengers on the East Coast Main Line were being promised more choice on Thursday, with the Office of Rail and Road granting both Virgin Trains East Coast and FirstGroup rights to operate new services on the London-to-Edinburgh railway.

FTSE 250 firm Stagecoach - which owns 90% of Virgin Trains East Coast - was granted new services between London and Edinburgh, Harrogate, Lincoln and Middlesbrough.

The services formed part of its successful bid for the East Coast franchise, which started in March last year and lasts until 2023 at this stage.

At the same time, the ORR granted fellow FTSE 250 firm FirstGroup approval to launch open access rail services - a new opening-up of competition to government franchise operators - between London, the North East and Edinburgh, in competition with Virgin.

Virgin’s core existing timetable has been approved from 2017, when its current track access contract expires. In addition, it has been granted firm rights for service extensions to Bradford, Lincoln and Harrogate from May 2019, and for Edinburgh and Middlesbrough from May 2021.

"We are pleased that Virgin Trains East Coast's application has been approved by the ORR,” said Stagecoach chief executive Martin Griffiths.

“Customers are at the heart of our extensive £140m investment plans to grow the East Coast franchise and provide a high quality, competitive alternative to air and road travel. We look forward to the introduction of our new Virgin Azuma trains from 2018.

“In the meantime, we are continuing to deliver on our plans by cutting journey times, transforming on-board service, expanding the timetable, linking communities and making significant premium payments to Government.”

FirstGroup's new ten-year open access track access rights approval will enable its subsidiary, East Coast Trains, to begin operating five trains per day each way between King’s Cross and Edinburgh Waverley, with intermediate stops at Stevenage, Newcastle and Morpeth, by 2021.

FirstGroup has promised an average fare of less than £25, free Wi-Fi and onboard catering, and a single class of travel.

“I’m pleased that the ORR has granted track access rights for our unique low-cost service between London, the North East of England and Edinburgh,” said FirstGroup chief executive Tim O’Toole.

“This is great news for passengers, as our new service will widen the choice of travel options between these cities and offer an attractive alternative to those available today.”

O’Toole said the company will offer genuinely low fares at half the average price of today, and add significant benefits to the UK economy.

He also promised the brand new trains will be cheaper than other rail services, greener than air travel, faster than coaches and will get passengers from London to Edinburgh earlier than they can arrive today.

“Now that our application has been approved and we have been granted rights we will implement the next steps to deliver our proposals which include discussions with Network Rail and rolling stock manufacturers,” O’Toole added.

Stagecoach expressed its disappointment at having to face a competitor and the associated loss of revenue.

"With respect to the decision on open access between London and Edinburgh, we do not believe the granting of these services within a franchised system and without a level playing field is in the best interests of passengers, taxpayers or communities,” said Stagecoach chief executive Griffiths.

"We will assess the ORR decision and implications in detail and review our options."