FirstGroup the British transport operator applied for two additional “open access” services, outside of the main train operating contract. The government is trying to reduce fares and increase competition in the rail network.
Open access is when the operator assumes all commercial risks, and runs services on infrastructure that belongs to a third-party, along a route chosen by the operator, which is not under a rail franchise established by the Department for Transportation.
FirstGroup started operating an open-access service between London and Edinburgh through its Lumo business in October 2021. The service has so far carried over 2.5 million passengers. It claims that cancellations of trains are among the lowest within the industry.
FirstGroup, encouraged by the success of Lumo said that it recently submitted applications to Office of Rail and Road (ORR) for a Hull Trains new service between London and Sheffield which could start as early as 2026 and a Lumo new service between Rochdale and London which could begin as early 2027.
The company has also requested the extension of several Lumo daily services between London, Hull and Glasgow. It has also requested an eighth additional return service via Hull Trains from London to Hull as well as an extra sixth Lumo return service between London and Newcastle. These services, if successful, will double the open access capacity of London to Newcastle in three to five year.
Graham Sutherland said that the new services would bring people to rail who might otherwise have chosen other modes of transport, such as car or plane. Just 0.3% of UK rail traffic is on open access routes.
Sutherland stated that Lumo fares begin at £19.90 when booked 12 weeks in advanced and an average of £40 is charged for a single London-Edinburgh ticket. The single ticket on LNER is about £50 for bookings made in advance.
Richard Branson’s Virgin Group is another player. , the company that used to operate as an open-access service on the West Coast mainline, wants to make a return.
FirstGroup, one the UK’s largest rail operators, with over 770,000 passenger journeys per day last year, reported that its open access operations continued to perform better in the year up to 30 March. The company reported that it has consistently recorded “some of the lowest levels in the industry of cancellations due to operator issues”.
Lumo’s revenues increased by 42% on the previous year. 75% of seats were full, compared to 71% in 2011.
Hull Trains’ revenues grew 40% in the last year due to an increase in leisure travel and a significant increase of business travelers. As a result, Hull Trains has increased capacity by 14% since December 2022. It now runs trains with 10 carriages instead of five during peak hours. Seats are 69% full compared to 59% last year.
FirstGroup’s adjusted profit before tax for the year was £136.8m, compared to £97.9m in the previous year. It monitors the European rail network to identify open access opportunities.
Sutherland said, “What’s happening in Europe is similar to what you see in the UK with open access.” “Italy, Spain and France are the areas where things move most quickly.” “But our priority is UK.”
Sharon Graham, Unite’s general secretary, stated that this bolstered the argument for public ownership. She continued: “FirstGroup extracts colossal profit from our bus- and rail-networks at the expense passengers and workers.” It is not logical to spend billions on subsidising public transportation and then let third-party operators profit from it by reducing jobs and services.
Sutherland stated that the majority of profits were reinvested in infrastructure and assets. The company also highlighted its average wage increase of 8% across both bus and rail over the last 12 months.
Rail industry leaders see them as inefficient, while the RMT union has described the new model as “parasitic”. Rail industry leaders view them as inefficient. The RMT union has described the new model as “parasitic”.
The Conservatives’ open-access policy on train providers and the Labour plan for a renationalisation that is “pragmatic” are both similar.
Labour’s policy document stated that open access would remain “where it adds capacity and value to the rail network”.
There are a number of routes in the pipeline. These include a direct London to Wrexham rail service announced in March. Also, trains will run from London straight to Stirling, Scotland. This service is planned by Grand Union which was founded by former British Rail executive Ian Yeowart.
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