Building on success. Virgin-Stagecoach and the InterCity East Coast franchise

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1 Building on success Virgin-Stagecoach and the InterCity East Coast franchise

2 A new approach for a new franchise We believe the InterCity East Coast franchise has the opportunity to become a truly world class railway, but a new approach is needed to deliver this. Our proposal for the franchise will be built on a partnership between two of the world s leading transport operators Virgin and Stagecoach bringing together over 20 years experience and a record of delivering improvements in the transport sector. Between us, we already operate an extensive long distance rail network, delivering regular daily services to London, the South and South West, the East and West Midlands, the North West and North East and Scotland. Our trains travel vast distances each day, serving the needs of every type of rail passenger, from the long distance business or leisure traveller to the short commuting or shopping journey. We have revolutionised passengers travel experiences, with new trains, new timetables, better performance and enhanced customer service; all with the single aim of delivering the highest quality service. Our approach is to work closely with stakeholders to deliver improvements, building on a foundation of partnership and understanding. The InterCity East Coast franchise is more than just a train service: it supports the economic generation of every region it serves; it reduces congestion on our roads and provides an environmentally friendly means of transportation; it promotes inclusion and social opportunity; and through its network of services, provides travel opportunities for all. We believe our vision, passion and determination make Virgin-Stagecoach uniquely qualified to establish the InterCity East Coast rail franchise as the standard-bearer for quality and customer service.

3 Virgin-Stagecoach Our new partnership brings together the skills, experience and resources of two international transport giants. We have established a single jointly-owned company called inter city-railways, with the specific aim of bidding to win the InterCity East Coast franchise. Stagecoach Group plc was founded more than 25 years ago and has spearheaded the development of efficient, easy-to-use, value-for-money services, across its networks of rail, bus, coach and tram services in the UK, and coach and bus services in North America. With empowered management able to focus on local issues and to listen and act on local concerns, our businesses have never lost sight of their connection to and the importance of our customers. To deliver this we have invested heavily in both improving the products we offer and by daring to be different in developing new products and services. By bringing together our two businesses we believe we can create a franchise to achieve the objectives set by the Government and to meet the aspirations of its passengers and stakeholders. The Virgin Group of Companies was formed in 1970 and has since become one of the most recognisable brands in the world, encompassing diverse markets such as air and rail transport, mobile and multimedia communications, personal banking and the music industry. Both our companies have been built on a similar ethos excellence in customer service and innovation and a desire not just to excel at what we do, but to ensure our customers enjoyed our service so much they want to travel with us again.

4 The value of a new franchise The InterCity East Coast franchise is more than just a high-speed service from London to Yorkshire, the North East and Scotland. Its trains fulfil the needs of the widespread and diverse business, commuting and leisure markets along its routes and, through these services, contribute to their economic strength and enhance the lifestyle opportunities of the communities they touch. Its frequent and reliable services offer short, medium and long distance journeys along its routes, and connect to an extensive network of other rail services providing an even greater variety of journey opportunities. Its stations are not just car parks and ticket offices; they are the gateways to the towns and cities it serves, providing the first impression for the arriving traveller. Its people provide the quality of service to make every journey special, by helping, assisting and informing passengers through each step of their journey. The new InterCity East Coast franchise offers an opportunity to put these services on a firm foundation, able to build on a record of service and quality. We believe only Virgin-Stagecoach have the experience, skills and reputation to provide the services passengers expect from the franchise and we look forward to delivering these.

5 What we will bring to the East Coast We already have extensive experience of providing transport services to communities along the InterCity East Coast route. We currently operate regular train services along the route from Yorkshire to the North East and East Scotland, and provide an extensive network of bus services throughout Cambridgeshire, Nottinghamshire, Lincolnshire, South Yorkshire and Tyneside, and across Central Scotland, The Highlands, Fife and Grampian. A strong focus on performance We work in partnership with Network Rail and other train operators to deliver continuous improvements in both the punctuality and reliability of our trains, monitoring any delay, investigating its cause and implementing practices to stop it recurring. A safe and secure service 58 of our stations have been awarded Secure Station Accreditation and our new trains have been built to the highest safety standards. We have invested in more staff at stations and on trains, including 56 TravelSafe Officers, to deliver the highest levels of personal security. A willingness to listen and adapt We know how important it is to listen to our stakeholders. Every year we consult widely on our proposed timetables and are always willing to look at and implement suggested changes if they could provide a better service. Delivering growth We have led the industry in utilising yield management techniques to provide discounted tickets, such as our revolutionary megatrain.com fares, making best use of available capacity on the rail network and delivering outstanding levels of passenger growth. Investing in a better future With new trains, improved stations, more infrastructure and better trained staff, we have invested heavily with our partners to provide the tools to grow the railway, and have set industry standards in developing environmental improvements. Creating a service everyone can use Through our approach to making the railways accessible and easy to use, and by integrating services with other forms of transport, we have concentrated on establishing a socially inclusive service.

6 Knowing what s important Knowing how to run a railway is only part of the answer. Our approach has always been to constantly challenge ourselves to make every passenger s journey special. To achieve this, we have concentrated on four themes innovation and investment; performance and punctuality; customer satisfaction; and attracting new passengers. Innovation and investment We have introduced almost 1700 new carriages on our franchises, and other trains have been completely refurbished. Millions of pounds been invested in our stations. We have pioneered dedicated internet booking facilities, including our new megatrain.com and print@home ticket services. We were the first to offer advance fares as singles allowing customers to mix and match. We also care about our environment, utilising regenerative braking systems to return electricity to the national grid and testing bio-fuel for our diesel trains. Performance and Punctuality Around 90% of South West Trains arrive on time. For Virgin West Coast the latest annual figure is around 87%. For Virgin CrossCountry its around 83%. Customer satisfaction 82% of rail passengers on South West Trains and 86% on Virgin West Coast said they were satisfied with the train service. 82% of CrossCountry customers were satisfied with the staff. 93% of West Coast, 89% of CrossCountry and 86% of South West Trains customers were satisfied with the condition of the trains. Customer complaints have fallen to an all time low of 11 per 100,000 journeys on South West Trains. All 41 South West Trains and 17 Virgin Trains stations have bee awarded Secure Station status.

7 Attracting New Passengers Over the last ten years passenger numbers have increased by: 83% on Virgin CrossCountry. 52% on South West Trains. 35% on Virgin West Coast. Over 197 million combined passenger journeys are made each year. 14,000 train services are operated every week. And its not just our passengers who have been impressed we ve won a few awards as well, including: Virgin Trains: 2006 Most Improved train fleet West Coast Pendolino. Virgin Trains: 2006 Best UK Domestic Train Service for Business Travel. South West Trains: 2005 Passenger Operator Of The Year. South West Trains: 2005 HSBC Rail Business Of The Year.

8 We want to hear your views We already have strong connections with many of the regions served by the InterCity East Coast franchise, and we understand well the issues the franchise faces. Our bid will be based on knowledge and experience, and a desire to look at how we can develop the franchise to meet these challenges. We would like to know where you would like to see the franchise improved, for example: What do you want to see onboard the trains? How can we improve the service at stations? Would you like to see customer service improved? Would you like more integration with other transport services? Do you think the range and availability of tickets is right? We look forward to working with you in planning the new InterCity East Coast franchise. We would very much welcome your thoughts. If there are any issues you would like us to be aware of, please contact us at the following address. Please write to: Richard Gibson Strategy Manager inter city-railways 8th Floor, Friars Bridge Court Blackfriars Road London SE1 8NZ Or us at: richard.gibson@virgintrains.co.uk