Virgin / Stagecoach win East Coast

[PG]

It depends how you perceive the market.

Stagecoach own the East Coast franchise, the West Coast franchise and the East Midlands franchise, meaning finding a competitor train company is a challenge.

So you decide to take the coach. Guess who owns Megabus?

Two points on this:

• Once the West Coast is re-bid - if First don't get it maybe they'll give the Competition and Markets Authority a swift nudge
• Stagecoach have successfully competed with themselves in the past - 192 corridor in Manchester

 

[Geezertronic]

Stagecoach? lol this company cant even run a bus on time and now theyre given the ECML. What a lark.

You are aware that Virgin Trains (West Coast) is 49% owned by Stagecoach? And that East Midlands Trains (that operate on the MML) is 100% owned by Stagecoach?

 

[Tetchytyke]

Stagecoach have successfully competed with themselves in the past - 192 corridor in Manchester

Stagecoach only ever use the Magic Bus brand when they are wanting to price a competitor off the road. In the case of the 192 that was UK North. In the case of the Oxford Road services it was UK North, Finglands and Bullocks. UK North went bust in 2007 and Bullocks were bought out by Stagecoach in 2008.

 

[bnm]

So stagecoach essentially have a monopoly on intercity routes going north out of London.

Stagecoach don't operate services to Norwich!

 

[pemma]

• Stagecoach have successfully competed with themselves in the past - 192 corridor in Manchester

Different products - one being the regular Stagecoach bus service, the other being the low-cost economy Magic bus service. It'd be more like Virgin having the LM franchise as well as the West Coast franchise than having both the West Coast and East Coast franchises.

Don't Stagecoach still operate the former Yorkshire Traction National Express services which compete with Megabus?

 

[rdeez]

Oh dear. I've already seen "Wow, Pendolinos on the East Coast!" and variants to that effect several times on social media.

/facepalm

 

[SGS]

And just one last thing. You know the cartoon infographic on Gov.UK? Is it me, or does the inside of the carriage look suspiciously like a 142? :lol

Well some of the passengers are smiling, so I suspect it's not a 142 nor an IEP.

 

[Bletchleyite]

Stagecoach only ever use the Magic Bus brand when they are wanting to price a competitor off the road.

Ish. That was the original intention with Oxford Road, and it was never intended to last - but that's an unusual case because there genuinely is enough business there to sustain multiple operators, which for a bus service is pretty rare. As it is now it provides price discrimination as well - basically first and second class buses, a concept which is very common in countries with lower car ownership - India for example, or Thailand.

Oxford Road is a bit odd at the minute, incidentally - First seem to be hitting it hard, but carrying almost no passengers - and from my experience and observation last Saturday First's drivers are very reluctant to actually bother stopping to pick anyone up! Can't see it lasting.

Neil

 

[pemma]

Stagecoach only ever use the Magic Bus brand when they are wanting to price a competitor off the road. In the case of the 192 that was UK North. In the case of the Oxford Road services it was UK North, Finglands and Bullocks. UK North went bust in 2007 and Bullocks were bought out by Stagecoach in 2008.

Not quite. Bullocks still exist as a company: http://www.bullockscoaches.net/coach_hire_manchester.php but they sold their bus operations to Stagecoach in 2008 but have since started new bus operations in acquiring school contracts and the 147 route in Manchester.

 

[All Line Rover]

Just announced Stagecoach/Virgin consortium got it. Hopefully they won't get West Coast now

Hopefully they will, rather. Virgin West Coast is far from perfect, but in my view still offers the best customer service of any franchised train company in the UK.

Given that Virgin East Coast is majority Stagecoach owned rather than majority Virgin owned, I wonder if customer service will still be of the same standard as Virgin West Coast. East Midlands Trains, for example, has an awful customer relations department.

 

[47802]

Different products - one being the regular Stagecoach bus service, the other being the low-cost economy Magic bus service. It'd be more like Virgin having the LM franchise as well as the West Coast franchise than having both the West Coast and East Coast franchises.

Don't Stagecoach still operate the former Yorkshire Traction National Express services which compete with Megabus?

I think that's the case yes, I don't see the big deal about competition anyway. if First had won that would have reduced competition on some sections of the ECML, and EMT and West Coast are up for renewal in the next 3 years anyway.

 

[Bletchleyite]

Hopefully they will, rather. Virgin West Coast is far from perfect, but in my view still offers the best customer service of any franchised train company in the UK.

Given that Virgin East Coast is majority Stagecoach owned rather than majority Virgin owned, I wonder if customer service will still be of the same standard as Virgin West Coast. East Midlands Trains, for example, has an awful customer relations department.

It will be interesting to see if any of that kind of thing is subcontracted to VT, or if we see a renaming of the current VT to Virgin West Coast (which it sometimes gets called anyway) to reduce any possible confusion.

Neil

 

[bnm]

Stagecoach? lol this company cant even run a bus on time and now theyre given the ECML. What a lark.

I used a Stagecoach bus yesterday. It was on time. :roll:

 

[All Line Rover]

So we lose the rewards scheme and get Nectar points.

If Virgin introduced Traveller on the East Coast that would more than compensate for frequent travellers. It's a terrific loyalty scheme; albeit one that is only open to passengers spending a few thousand a year on First Class fares.

 

[47802]

I used a Stagecoach bus yesterday. It was on time. :roll:

Well Arriva buses where I live are actually quite good, so you carn't always judge a companies train service by the bus service and vice versa, plus of course the East Coast franchise is still part Virgin.

 

[All Line Rover]

Stagecoach own the East Coast franchise, the West Coast franchise and the East Midlands franchise, meaning finding a competitor train company is a challenge.

The BBC briefly mentioned the competition issue. I'm not wholly convinced. East Midlands Trains competes against Virgin West Coast between Manchester and London, even though Stagecoach is a shareholder in both companies. Having said that, if East Midlands Trains was owned by a different company, it would certainly alleviate competition concerns given that it is able to compete against the West Coast and East Coast franchises.

 

[shinkansen1966]

If Virgin introduced Traveller on the East Coast that would more than compensate for frequent travellers. It's a terrific loyalty scheme; albeit one that is only open to passengers spending a few thousand a year on First Class fares.

Virgin won't.

Read the DfT statement. East Coast Rewards is being replaced by a lousy Nectar scheme. At the moment, if you spend £220 on the East Coast Trains web site, you get a standard class ticket. With Nectar, you are going to have to spend £250 a year to get £2.50 off your Sainsbury shop.

Which is better ? £2.50 off a Sainsbury's shop or a free standard class ticket on East Coast Trains ?

#keepeastcoastrewards

 

[All Line Rover]

Virgin won't.

Read the DfT statement. East Coast Rewards is being replaced by a lousy Nectar scheme. At the moment, if you spend £220 on the East Coast Trains web site, you get a standard class ticket. With Nectar, you are going to have to spend £250 a year to get £2.50 off your Sainsbury shop.

Which is better ? £2.50 off a Sainsbury's shop or a free standard class ticket on East Coast Trains ?

#keepeastcoastrewards

How do you know that?

Virgin West Coast operates Nectar and Traveller. It's operated Traveller for many years. It only introduced Nectar recently. Nectar is the broad 'loyalty' programme while Traveller is the more exclusive loyalty programme for higher spenders.

Virgin have implied that they intend to continue with Traveller should they win the West Coast franchise in 2017, so I'd be surprised if they didn't introduce the programme to the East Coast franchise, which serves a similar market.

Here's the quote from the Virgin Trains website:

What will happen to Traveller once the franchise expires?

This will depend on the outcome of the franchise. Members will be informed before the current franchise finishes of any changes once a decision has been made to operate the West Coast Mainline.​

If Virgin Trains intended to scrap the Traveller programme, it wouldn't depend on the outcome of the franchise. So the implication is that Virgin intend to continue with Traveller.

 

[maniacmartin]

I wonder if they will moving their ticket-selling to be powered by The Train Line

 

[Altnabreac]

Virgin won't.

Read the DfT statement. East Coast Rewards is being replaced by a lousy Nectar scheme. At the moment, if you spend £220 on the East Coast Trains web site, you get a standard class ticket. With Nectar, you are going to have to spend £250 a year to get £2.50 off your Sainsbury shop.

Which is better ? £2.50 off a Sainsbury's shop or a free standard class ticket on East Coast Trains ?

#keepeastcoastrewards

They do say you'll be able to redeem Nectar points against travel as well:

New partnership with Nectar, the UK's leading coalition loyalty scheme, allowing customers to collect points and also redeem them against their travel with ICEC, a rail industry first

So really it depends what the price point for ticket redemption is.

 

[GrimsbyPacer]

So Stagecoach have all London to North routes in their pockets. No competition so no need to deliver on these fantastic promises. Remember GNER said they would open new stations and didn't.
The Sunderland and Bradford services will threaten Grand Central.

 

[Bletchleyite]

I tend to take National Express coaches , and would prefer the train but the coach prices are extremely competitive

They are, but they're incredibly slow, and subject to delay.

Though one thing that would win me over despite that is 2+1 seating (like Megabus Gold, but sadly they don't serve Milton Keynes, though preferably forward-facing rather than tables) and the ability to guarantee[1] a seat on the 1 side by reservation.

[1] If they substituted the coach for a hired one, that would mean a pair of seats to myself, I guess.

Neil

 

[3141]

As for the win, well, I guess all those millions Brian gave to the Scottish National Party have just cashed in.

I'm sure you're right (as always). The huge influence the Scottish National Party has over DfT decisions is well known, to the extent that the DfT would risk a challenge from one of the losers once they knew that the Stagecoach/VT bid had been lower than theirs.

 

[shinkansen1966]

How do you know that?

Because I tweeted the DfT who said "new operators will honour the existing scheme for a period and have plans to introduce their own excellent reward scheme"

And when you read the Stagecoach press release
http://www.stagecoach.com/media/news-releases/2014/2014-11-27.aspx
"new Nectar loyalty programme"

So that's it. DfT are scrapping the East Coast rewards scheme and replacing it with lousy Nectar points. They could have insisted that the future operators retained East Coast rewards scheme. But chose not to.

 

[All Line Rover]

Because I tweeted the DfT who said "new operators will honour the existing scheme for a period and have plans to introduce their own excellent reward scheme"

And when you read the Stagecoach press release
http://www.stagecoach.com/media/news-releases/2014/2014-11-27.aspx
"new Nectar loyalty programme"

So that's it. DfT are scrapping the East Coast rewards scheme and replacing it with lousy Nectar points. They could have insisted that the future operators retained East Coast rewards scheme. But chose not to.

But they haven't said that they aren't introducing Traveller, have they? It's a niche programme, so I wouldn't expect them to mention it in a public press release. Virgin West Coast has rarely mentioned Traveller (despite mentioning Nectar constantly) in public communications, but still appears to be committed to the programme.

Nectar is awful, though. I agree with you on that.

 

[Greeby]

There are more deserving winners, ie DOR, who have done very well running the East Coast for the past 5 years. The fact that this is being done less than 6 months before a general election was an act of spite by the Tory government.

Some key questions
1) Will the cost of 'Anytime' fares go through the roof like Standard Open fares did when Virgin took over the West Coast route ?
2) If Virgin / Stagecoach aren't awarded an extension when the eight years is up, will Beardy and his cronies go running to the courts, like they did with the West Coast a couple of years ago ?

They already are through the roof, same as most long-distance Anytime fares

 

[pemma]

Well Arriva buses where I live are actually quite good, so you carn't always judge a companies train service by the bus service and vice versa, plus of course the East Coast franchise is still part Virgin.

One thing that seems to be commonplace across all the big bus operators is if they have a route which they are breaking even on or only making a small profit on, they want to get rid of it. Smaller operators seem happier to keep such routes and even take over such routes when bigger operators give up on them.

 

[samuelmorris]

I've mixed opinions on this.

Positive:
- Stagecoach's bus service punctuality has absolutely no bearing on this whatsoever - bus punctuality is largely dependent upon city road traffic flow, which we all know is usually dreadful.
- I'm fairly content with how Stagecoach have operated rail services I used (e.g. EMT to Sheffield, VT to Manchester and various SWT routes. My experience with EMT and VT is limited but has been good on the few occasions I've used it). Lincolnshire rural services notwithstanding they seem to do a pretty admirable job, so I'm not too worried about the East Coast franchise going downhill with them running it.

Negative:
- I am a little concerned how things will pan out long-term if Stagecoach are awarded all three franchises (i.e. if MML and WCML are relet to them).
- Is the multi-million pound refresh of the Mk3s and Mk4s really necessary with 4 years to go until the IEPs are delivered? Seems more like an opportunity for rebranding to me.
- Virgin's anytime fares on the WCML are ludicrous. While they have pledged an initial 10% fare cut, East Coast fares are still not exactly cheap per-mile, and I can only see them rising again fairly sharply to cover the cost of the new rolling stock...

When I say ludicrous:

London Euston - Manchester Piccadilly return: £321.00, 367 miles - £0.87/mile
London Kings Cross - York: £249.00, 387 miles - £0.64/mile
London St Pancras - Sheffield: £186.00, 317 miles - £0.59/mile

 

[talltim]

East Coast's success was not down to being publicly owned. It was run as a private company by managers from the private sector. It was evidently run very well, but its ownership was not the sole reason for its success and as resale/refranchising was always the plan, the operation had to be suitably attractive to bidders.

Agreed, but it does prove that publicly owned doesn't have to equal worse than privately owned. Plus of course ALL profits go back to the public sector to help pay for other things

 

[class26]

Some interesting stuff (different ways of getting to Wearside and Teesside than existing Grand Central services).

And, thankfully and end to the "you can't run franchise x if you already run franchise y" nonsense that we keep seeing brought up (or the "First Group were promised East Coast as consolation prize for losing West Coast/ ScotRail" conspiracy theory guff).

No additional services to Dundee/ Aberdeen, no Scarborough services (as consolation for them losing their TPE services to Manchester/ Liverpool), no "Sheffield via Retford" (something that Virgin proposed around the Millennium time), no bi-hourly Lincoln service, no "Manchester via Huddersfield" service (just Leeds - Huddersfield) - a few rumours don't seem to have come true.

Worth reiterating that the "...but DOR paid a premium, why are we paying a private company instead" argument falls down in the face of the fact that Stagecoach are paying £3.3bn of premium over eight years, compared to £1bn over five years premium from DOR).

Of course the Enthusiast reaction will either be "they've overbid, so they'll be handing the keys back" or "they've underbid and we'd have got more premium with public ownership - the private sector can't win in some people's eyes.

I say that because a lot of people's minds were made up before hand (regardless of what was in the actual bid). E.g. the Mick Cash quote in the Guardian: http://www.theguardian.com/uk-news/...oach-east-coast-inter-city-rail-franchise-win



...don't worry about the fact that this private sector bid will pay *more* into Government coffers than DOR did, Mick Still, don't let facts get in the way of ideology.





I'm a bit disappointed by the thread - I still have "IEP will smell of poo" and "does this mean 350s on the ECML" until I have Forum Bingo!



True - and GC can't complain about "competition" if the dominant operator decides not to roll over and cede market share.

With East Coast (VEC? SEC?) actually running to Huddersfield (rather than Mirfield/ Brighouse) that could take a big chunk of the Kirklees trade from Grand Central, depending on the timing of the service.
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Since there are practically no places where you'd consider a journey to London via the ECML, MML and WCML, that's irrelevant.

If you are travelling from Newcastle or Liverpool or Leicester then the fact that another railway line is run by the same company is irrelevant.

We cope with one company running all services from Brighton to London, or Swindon to London or Ipswich to London, after all.

(and Megabus are trivially small compared to National Express, but don't let that spoil your rant)

But there ARE going to be bi hourly to Lincoln