Rail agency FirstGroup plans to broaden cut-price Lumo providers

British transport operator FirstGroup has utilized for 2 extra “open entry” providers exterior the most important prepare working contracts as the federal government makes an attempt to extend competitors on the rail community and lower fares.

Open entry means the operator takes full industrial threat, working providers on infrastructure owned by a 3rd social gathering, on a selected route that’s not topic to a rail franchise set by the Division for Transport.

FirstGroup started working an open entry service by its Lumo enterprise between London and Edinburgh in October 2021, which has carried greater than 2.5 million passengers to this point. It says prepare cancellations are among the many lowest within the business.

Inspired by the success of Lumo, FirstGroup mentioned it has lately submitted purposes to the Workplace of Rail and Highway for a brand new Hull Trains service between London and Sheffield, which may begin in 2026, and a brand new Lumo service between Rochdale and London, which may start in 2027.

It has additionally utilized for the extension of quite a few Lumo’s every day providers to and from Glasgow; for an extra, eighth return service on Hull Trains between London and Hull and for an additional, sixth return Lumo service between London and Newcastle. If profitable, these providers will greater than double its open entry capability over the following three to 5 years.

Together with different rail operators corresponding to Richard Branson’s Virgin Group, which wants to make a comeback on the West Coast main line it used to run on an open entry foundation, FirstGroup has promised cheaper fares to under-served UK locations.

FirstGroup, one of many UK’s greatest rail operators with greater than 770,000 passenger journeys every day final yr, mentioned its open entry operations had continued to carry out higher than anticipated within the yr to 30 March. It has “persistently recorded a number of the lowest ranges of operator associated cancellations within the business”, the corporate mentioned.

Lumo elevated revenues by 42% yr on yr, with 75% of seats full, up from 71% the yr earlier than.

At Hull Trains, revenues rose 40% final yr due to elevated leisure demand and considerably greater variety of enterprise passengers. In response, the corporate has added 14% extra capability since December 2022, working trains with 10 carriages moderately than 5 at peak instances. Seats had been 69% full, up from 59% the yr earlier than.

The corporate mentioned: “We may also proceed to watch alternatives for brand spanking new open entry entrants within the European rail market the place there are comparable regulatory frameworks and industrial fashions to the UK.”

The federal government has inspired purposes for extra open entry rail providers to extend competitors with the main line operators. Nonetheless, rail business leaders see them as inefficient, whereas the RMT union has described the new model as “parasitic”.

Labour’s plan for a “pragmatic” renationalisation of the railways matches the Conservatives’ policy on open access train providers.

Labour’s policy document mentioned open entry “will stay the place it provides worth and capability to the rail community”.