FirstGroup has provided evidence that consumers are prepared to persevere with railways despite disruption which has posed big challenges for travellers in recent months.
The group said yesterday that demand for the Lumo services it runs between Edinburgh and London had been stronger than anticipated due to increased leisure travel during the summer period. The Hull trains business also performed well.
The performance was achieved during a period when rail services across the UK were impacted by long-running industrial action orchestrated by the RMT and Aslef trades unions in support of demands for pay increases.
Lumo appears to have benefited from the fact that its staff did not participate in strike action. As a result, Lumo services were subject to less disruption than those on other lines.
Industrial action led to widespread cancellations, which may have boosted the appeal of air travel and car usage.
FirstGroup also runs South Western Railway and Great Western Railway. It operates the Avanti West Coast service linking Glasgow to London, with Italy’s state-owned Trenitalia.
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FirstGroup did not provide details of passenger numbers on these operations.
In May the company lost its contract to run TransPennine Express when the service was nationalised following what the Government described as months of significant disruption and regular cancellations on the network.
The company also faced the potential loss of the Avanti West Coast franchise after the Government expressed concern about poor performances on vital routes.
However, last month Avanti West Coast’s contract was renewed for up to nine years.
Transport minister Mark Harper said the company was back on track. The Department for Transport noted cancellations had been cut to 1.1 per cent in July, from 13% in January.
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It highlighted the fact that Avanti had trained and brought on over 100 additional drivers since April 2022.
With FirstGroup set to receive higher than expected fees from the Government for running services, management think the rail business could earn up to £15m higher than forecast in the current year.
Analysts at FirstGroup’s joint house broker Liberum Capital expect FirstGroup’s rail business to benefit from supportive policy moves to reduce car usage, which will also help its bus business. Rishi Sunak’s attempts to position himself as the drivers’ friend, by delaying the proposed bank on the sale of new petrol-fuelled cars to 2035, from 2030 is not expected to disrupt the long-term shift to public transport.
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