Transport groups have a long history, and they are still playing a major part in the industry at the moment. Whether they will still be doing so in Britain in a few years from now is another matter.

At present, to take just two examples, FirstGroup runs Great Western Railway and the open access operators Hull Trains and Lumo. It also has majority stakes in Avanti West Coast and South Western Railway. Transport UK has East Midlands Railway and the majority of Greater Anglia, Merseyrail and West Midlands Railway. Both these groups also run buses.

FirstGroup’s last accounts show that its revenues come from trains and buses – in that order. In the year to 30 March 2024 rail revenue was £3,738 million while buses turned over £1,012 million. Adjusted profits from rail were £143 million, and from buses they were £84 million.

Open access train services – Hull Trains and Lumo – made a significant contribution, because they accounted for just over a quarter of the rail profits. Between them, open access rail and First’s buses made a profit of £121 million, while train operators with DfT contracts made a profit of £106 million. In other words, without the DfT rail contracts First’s profits would have been almost halved last year.

And yet First will soon have to manage without those contracts, because the government intends to renationalise the remaining former franchises within the next couple of years, so transport groups like First have been concentrating – hard – on open access, particularly since the election and the Labour landslide.

No wonder, then, that the Group’s chief executive Graham Sutherland said in December: ‘Growing our open access rail portfolio is a key priority for FirstGroup.’

He is not the only one. Apart from First’s ambitions to extend Lumo to Glasgow and also provide new services to Paignton and Rochdale, there are also outstanding applications for more open access routes from Virgin and, rather remarkably, Alstom, which is better known for building trains than operating them.

It is almost a year since Alstom unveiled its vision for new open access train services between London and Wrexham, echoing the old Wrexham & Shropshire operation owned by Arriva which ceased trading in January 2011.

Alstom, which is working in partnership with SLC Rail, sees its Wrexham services using part of the West Coast Main Line and arriving at London Euston rather than Marylebone, five times a day.

Virgin, meanwhile, is proposing as many as five open access routes, also starting from its old home at London Euston, to places such as Manchester, Rochdale (or Preston), Liverpool, Birmingham and Glasgow.

If Virgin and Alstom both gained approval for their separate schemes, they would need something like 80 paths a day between them on the West Coast Main Line between London and Rugby.

This could mean a veritable capacity crunch, and the possibility seems to be worrying transport secretary Heidi Alexander, who wrote to the Office of Rail and Road on 6 January this year voicing some reservations about the sudden boom in open access applications.

She is concerned about the lower track access charges paid by open access operators (bearing in mind that the infrastructure is funded by taxpayers) and also the capacity of the network.

That was in early January. Since then, FirstGroup has hosted an event at which it highlighted the merits of open access, but it has just emerged that the Department for Transport wrote to the Office of Rail and Road a week ago, setting out its updated views of more open access.

Basically, the verdict from Horseferry Road is thumbs down. Applications are mostly not being supported, mainly on the familiar grounds of lack of capacity and revenue abstraction.

In some cases (Virgin’s, in particular) applications seek to use unoccupied paths which currently belong to contracted operators.

Such operators are set to be steadily renationalised, starting with South Western Railway in May, so Virgin is not really up against the First/Trenitalia operator Avanti West Coast, but the future state railway manager Great British Railways, and the DfT is having none of it, saying: ‘We do not believe that the quantum of paths sought is feasible or realistic and note that the WCML already operates at close to capacity, particularly into/out of London Euston.’

It goes on to add: ‘This application is also at odds with work already underway as part of the Transpennine Route Upgrade and Manchester-focused projects included as part of the Rail Network Enhancement Pipeline. The business cases for these projects, which have been agreed to and announced by Ministers, are predicated on the efficient delivery of financial and passenger benefits by DfT-procured services.’

‘DfT-procured services’ will, of course, soon be Great British Railways services.

Only one of the current open access applications has managed to survive the bleak stare of the DfT, which says it is ‘supportive in principle of WSMR’s proposals to operate new Open Access services between Wrexham General and London Euston, subject to further assessment by Network Rail of performance impacts.’ As for the rest, we don’t think so.

The ORR makes the final decision, but the DfT’s views surely cannot be disregarded.

The result is that transport groups may look increasingly overseas, and particularly to mainland Europe, where some of them are already running local train and bus routes. First Rail’s Steve Montgomery hinted that First could be poised to cross the Channel at FirstGroup’s open access presentation. National Express went abroad after selling the c2c franchise in 2017, and it now runs a number of train services on the continent.

Will Virgin run from Euston again? The odds against it seem to be all but overwhelming now.

(A full, illustrated version of this essay forms the feature in the February print edition of Railnews, published Thursday.)

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