First win Intercity West Coast franchise

[WillPS]

Virgin claimed:

1. The system is flawed
2. The flawed system was not followed.

The first has nothing to do with the judiciary review, that relates entirely to the second. Virgin's claim here is that the numbers (which are not all available to them or anybody other than the DfT and FirstGroup internally) don't add up. FirstGroup say Virgin are mistaken.

If Virgin are mistaken ("inputting the wrong numbers"), which is entirely possible given they're working from a document which doesn't outline useful numbers and rather has the 'PR friendly' useless numbers, they have no case.

I think we can all agree that there should be more transparency but that's not going to change who the next (private) operator of the West Coast Mainline will be.

 

[LNW-GW Joint]

Virgin: usual silvery words from Branson, but the level of bid feedback from DfT seems pathetic.
If Vernon's explanation is right, there were "10 scores" reported back, as well as the winning premium profile, but we didn't get to hear what they were.
New routes commitments seemed fairly solid.

First: it's obviously Vernon's bid. He knew everything, O'Toole was left floundering at times.
They kept their fares policy close to their chest; no change on peak hours.
I thought the new routes commitments were rather vague.
In the end it sounded like they were treating WC as a "bigger TPE" franchise.
You can get high occupancy on TPE if you only run 3-car trains.

Who would you choose?

 

[WatcherZero]

We were talking about advance fares no????

Nice of you to change the subject though.
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Go look at a single article about the railways in the UK and every article quotes the highest anytime fare. I believe he said the word people, not passengers which is a huge difference.

Be a non rail user, not know anything about the cost so do a search for fares, your first three hits are discounted fares sites.

 

[WillPS]

He claimed 40-80% of people/passengers surveyed were only aware of the standard rate and didnt know about discounted or advance fares, to me that seems rather high, especielly if only 21% of people are actually using them.

Sounds about right to me. The price of a Manchester to London return, definitively, is about £300. That number puts punters off even investigating the possibility of using the railways for that journey.

Of course, those that investigate further will take the much more sensible off-peak/advance products.

 

[F Great Eastern]

Be a non rail user, not know anything about the cost so do a search for fares, your first three hits are discounted fares sites.

Generally such people don't check up such things, they believe what they read in the press or go up to the station and try and book and then get put off.

Also believe it or not, not everyone has the internet or knows how to use it.

 

[eastdyke]

RB is giving more misleading spin on BBC News right now!

 

[WatcherZero]

I dont really see how reducing 20% of the the standard fares by 20% from £300 to £240 is going to attract that much more

 

[jon0844]

I happen to like the idea of the intermediate class (didn't Virgin actually have this at the beginning?) and have repeatedly mentioned the Eurostar example - as did First today.

On a recent business conference in Manchester, I paid £72 return with advance tickets. I was quite happy given two hours is not very long.

However, if I was going to Manchester with the wife and son, I'd seriously consider first class - but that's expensive in a lot of cases (yes, sometimes FC is cheaper but it really depends just how inflexible you are prepared to me). I'd certainly consider a leisure-select/premium standard type service for the extra room, and maybe free tea and coffee even if you get sod all else.

I suspect a lot of people on leisure travel would consider the extra. If you look at the consumer electronics industry, and especially Apple, it's great to offer a good headline figure and then let people voluntarily upgrade. Any extras somehow don't get perceived as part of the price, and you convince yourself that you personally chose those and weren't forced to pay.

So, you get your cheap ticket in standard and then get the offer to update to premium for £10 or £20 more. Well, the tickets cost £xx in total, which you budgeted for, but - heck - why not.

That's why Apple often advertise goods in their stores with the price card (now an iPad) showing three versions and three prices.

The entry level is the basic one that allows the advertising to say 'from £xxx', the top-end one is the model that is just a bit too expensive and possibly overkill.. leaving the middle priced one that is a compromise and the one that most people go for.

 

[WillPS]

Generally such people don't check up such things, they believe what they read in the press or go up to the station and try and book and then get put off.

Also believe it or not, not everyone has the internet.

Virgin also do a rather poor job of pushing their headline fares in the manner that most TOCs do, which doesn't help.

 

[F Great Eastern]

I didn't realise there was a flat rate of £300 for any anytime fare. But nice of you to try and give that impression.

It is ironic though to see people moaning about fares coming down, usually they are moaning as they are going up.

 

[eastdyke]

RB really does need to stop patronising taxpayers.

During the Select Committee meeting RB said that he had made enough money and didn't need to worry about breakfast etc., therefore profit was not his only motive. I guess clever questioning should have switched to the Stagecoach guy and asked him if his shareholders held a similar view.

RB also said that if he had won East Coast they would have had 'faster trains'.

 

[WatcherZero]

Well if Club class are first class seats (which I believe he said today) just without first class catering, how much less can you charge for them before people start downgrading? The same seats without a meal but save £10? 30? £50?

 

[F Great Eastern]

RB also said that if he had won East Coast they would have had 'faster trains'.

If I had East Coast, I'd have provided free meals, unlimited coffee, faster trains, 50% off all tickets, more regular services just to start.

Very easy to say when it's in the past.

 

[WillPS]

RB also said that if he had won East Coast they would have had 'faster trains'.

I noted that too. Perhaps this is the 135mph nonsense Virgin were claiming was possible on the West Coast on the misunderstanding that 140mph signalling isn't possible means 135mph might be, rather than 125mph is the maximum.
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Well if Club class are first class seats (which I believe he said today) just without first class catering, how much less can you charge for them before people start downgrading? The same seats without a meal but save £10? 30? £50?

He said 'more room' not First Class seats. Coach D on Virgin's SuperVoyagers has 'more room' but does not have First Class seats!

And you're underestimating the level of elitism involved with the punters paying hundreds of pounds for walk-up 1st class tickets.

 

[LNW-GW Joint]

If I had East Coast, I'd have provided free meals, unlimited coffee, faster trains, 50% off all tickets, more regular services just to start.
Very easy to say when it's in the past.

This was the first bid when they were proposing a new by-pass line north of Peterborough, at 140mph (Bowker's bid).
This was when 140mph was still on offer on the WCML.

 

[WatcherZero]

I noted that too. Perhaps this is the 135mph nonsense Virgin were claiming was possible on the West Coast on the misunderstanding that 140mph signalling isn't possible means 135mph might be, rather than 125mph is the maximum.
--- old post above --- --- new post below ---


He said 'more room' not First Class seats. Coach D on Virgin's SuperVoyagers has 'more room' but does not have First Class seats!

And you're underestimating the level of elitism involved with the punters paying hundreds of pounds for walk-up 1st class tickets.

They actually put in their 2000 East Coast bid to buy 60 TGV's for the East Coast and upgrade the line for 200mph running by 2009.

 

[eastdyke]

They actually put in their 2000 East Coast bid to buy 60 TGV's for the East Coast and upgrade the line for 200mph running by 2009.

Did that actually go in the bid or was that just what Virgin 'talked about' at the prelim stage?

And if it did go in the bid ask why they didn't get the Franchise.

 

[WillPS]

They actually put in their 2000 East Coast bid to buy 60 TGV's for the East Coast and upgrade the line for 200mph running by 2009.

Has there ever been any indication from anybody that such an upgrade is feasible?

 

[WatcherZero]

It was before the West Coast upgrade failed so if you think of the time they were still planning to have 140mph West coast services by 2003 or something like that. Remember also the APT project proposed 155mph running on the West Coast way back in the 70's. So with a bit of straightening yes it could have been possible, peoples are still talking about upgrading the GWML for 140mph with the belief the track itself could run trains as fast as 160mph with little alteration.

 

[YorkshireRider]

Tim O'Toole rightly points out that Virgin would have faced exactly the same reality as NXEC did.

Yes, but faced it with a more realistic bid which had been stressed stress tested for exactly the economic situation that came along.

 

[F Great Eastern]

Did that actually go in the bid or was that just what Virgin 'talked about' at the prelim stage?

And if it did go in the bid ask why they didn't get the Franchise.

Best reference I can find is:
http://news.bbc.co.uk/2/hi/business/667373.stm

 

[Realfish]

45 on FGW and 50 on TPE is what I heard.

To resolve the argument it's possible to go on to the HoC site and listen again.

As you say, what O'Toole said was that FGW was around the mid 40's and TPE around 50% (which was the level of seat occupancy that he wanted to achieve on WC - an increase of 10 points).

The thing that seemed to prick interest the Committee, I think, was the description of dialogue between DfT and First (or paucity of it) regarding the financial safeguards required. To me the process described by First, sounded a bit like a perfunctory way of legitimising the highest ££££'s bid.

I think VT and their lawyers might latch on to this.

 

[gwr4090]

The thing that seemed to prick interest the Committee, I think, was the description of dialogue between DfT and First (or paucity of it) regarding the financial safeguards required. To me the process described by First, sounded a bit like a perfunctory way of legitimising the highest ££££'s bid.

I think VT and their lawyers might latch on to this.

The level of the financial safeguards requested by DfT would have been evaluated beforehand by careful analysis of the bid and examination of First Group's published accounts. As First clearly sated, the figure was more or less in line with their own expectations, so it would not necessarily require much dialogue. In fact the DfT figure was eventually reduced slightly by £15M.


My impression from the Transport Select Committee meeting was that Virgin's case that First's bid is unsustainable is (inevitably) based very largely on guesswork and assumptions, most of which were subsequently proved wrong by First Group's comments. Eg the First bid is not heavily backloaded as Virgin claim. Also the figure Virgin quotes for First Group's investment comitment is for the first 5 years only, not the whole 15 year franchise as Virgin imply. Also First made a reasonable case for where the anticipated growth in revenue will come from (mainly volume growth and also some Eurostar style additional fare/class options to entice peole to upgrade). First's case is aided by the very strong growth 200% they have achieved on the Midlands-Scotland services which they took over from Virgin. I also found it particularly telling that the Virgin WCML load figures are currently very low compared with FGW and TPE, so there is plenty of scope for further growth by good marketing, let alone the additional coaches that it wishes to introduce. So Virgin's claim that every seat will need to be occupied at the end of the 15years is clearly ridiculous. Verdict: First Group 1, Virgin 0.

David

 

[bnm]

They actually put in their 2000 East Coast bid to buy 60 TGV's for the East Coast and upgrade the line for 200mph running by 2009.

Virgin were going to buy this rolling stock? They were going to upgrade the line?

Just like they bought the Pendolinos and upgraded the WCML I assume. :roll:

 

[YorkshireRider]

What Midlands to Scotland services did First take over from Virgin?

 

[yorkie]

We have received some complaints that someone is giving out incorrect information. Obviously we all make mistakes but if someone is consistently doing that then we need to ensure that it stops.

If you reasonably believe this to be the case, please use the report button (

). While we cannot always know what is, and isn't, correct, when several people say that one person is giving out incorrect information we can be reasonably sure of the situation and that helps us to take appropriate action. Thanks.

 

[snail]

What Midlands to Scotland services did First take over from Virgin?

It was Manchester to Scotland.

 

[Aictos]

They actually put in their 2000 East Coast bid to buy 60 TGV's for the East Coast and upgrade the line for 200mph running by 2009.

Any chance if the paperwork for this is available for public use?

 

[91101]

http://www.therailwaycentre.com/Artists impressions/VirginTGV.jpg

Not paperwork per se, but this was the image that headlined Rail Magazine when the Virgin TGV story broke!

 

[SS4]

According to this article: http://www.bbc.co.uk/news/uk-politics-19548012 can anyone clarify what Tim O Toole means by

He said his firm would put in place an "attractive" fare structure, including a 15% reduction in standard tickets and new categories of fares, including a new class between standard and first.

How would that be managed on the existing stock? What is likely to happen is that STD will stay largely as is, the current 1ST fares will become this middle fare and a new, much higher fare for 1ST without changing much if anything.