Yahoo Finance Budget East Coast Train Service Is Approved
The operator of the East Coast Main Line has not ruled out the prospect of a legal challenge to the approval of a rival budget service.
Stagecoach, the company which owns 90% of Virgin Trains East Coast, said it was reviewing its options after regulators gave FirstGroup the go-ahead to compete with Virgin on the line between Edinburgh and London.
The 10-year deal approved by the Office of Rail and Road (ORR) will allow FirstGroup to operate five trains a day each way via intermediate stations at Stevenage, Newcastle and Morpeth from 2021.
Virgin, which has the franchise until at least 2023, has also been granted permission to offer more services from 2019 with trains operating beyond the main line to Middlesbrough, Harrogate, Lincoln and Bradford.
The news was announced on the same day the ORR confirmed that rail punctuality has reached a nine-year low in the last financial year with over 10% of trains failing to arrive on time in the 12 months to March.
Virgin Trains East Coast was found to be the second-worst performer with just 85.2% of services on time.
FirstGroup has pledged its trains would offer cheaper fares and free Wi-Fi but they would not be as fast.
Its chief executive, Tim O'Toole, said: "This is great news for passengers, as our new service will widen the choice of travel options and offer an attractive alternative to those available today.
"We will offer genuinely low fares at half the average price of today, while adding significant benefits to the UK economy.
"Our brand-new trains will be cheaper than other rail services, greener than the plane, quicker than the coach and will get passengers from London to Edinburgh earlier than they can arrive today, all for an average fare of less than £25."
Stagecoach boss 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 (Other OTC: UBGXF - news) ."
