FirstGroup to challenge Virgin with £25 Scotland-London fare

Cut-price fares between Edinburgh and London on the east coast main line are on track after former ScotRail operator FirstGroup won the right to take on Virgin Trains East Coast (VTEC).

Thursday, 12th May 2016, 9:34 pm
Updated Friday, 13th May 2016, 10:32 am
Virgin Trains will face competition from FirstGroup on the east coast main line. Picture: Jon Savage

Aberdeen-based First will operate five trains a day in each direction for ten years from 2021, and has promised average fares of less than £25 – around half the current standard ticket price.

VTEC, the line’s main operator, has also been given approval to run more services from 2019, after adding four more in each direction from next Monday.

However, plans for faster services by a third bidder, Great Northern Eastern Railway (GNER), which has taken the name of a former operator on the route, have been knocked back.

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FirstGroup chief executive Tim O'Toole. Picture: Jon Davey

First said its services would encourage passengers to switch from flying and coaches. Chief executive Tim O’Toole said: “Our brand new trains will be cheaper than other rail services, greener than the plane and quicker than the coach.”

And Steve Montgomery, a former ScotRail managing director who now heads First’s UK rail division, said that its passengers would not have less space despite lower fares, saying: “We will not be crushing people in.”

Passenger watchdogs welcomed the decision by the Office of Rail and Road (ORR).

FirstGroup chief executive Tim O'Toole. Picture: Jon Davey

Transport Focus passenger director David Sidebottom said: “Passengers will welcome these extra services. More choice is a positive thing, especially as it can add pressure to keep prices low across all the operators on a route.”

But Perth-based Stagecoach, which owns 90 per cent of VTEC, said the move would hit its franchise, which involves paying £3.3 billion to the Treasury.

The firm has denied persistent rumours of underperformance despite analysts at HSBC claiming in March it was “falling behind its targets”.

Stagecoach chief executive Martin Griffiths said: “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.

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

ORR director of railway markets and economics John Larkinson said: “These new train services will give passengers more choice on services to Edinburgh and London and provide more frequent trains to towns and cities which are not so well served today.”