LIST OF MEMORANDA NOT INCLUDED IN THE
MINUTES OF EVIDENCE
Supplementary Memorandum by First Group
PLC (IT 50A)
1. GROWTH IN
(a) What assessment have you made of the likely
future increase in the number of bus and rail passengers?
All First Group's bus and rail subsidiary companies
are required to produce three year business plans. Each includes
a forecast of passenger numbers, the plans to generate and cater
for increases in demand and an assessment of the reasons behind
(b) What Research is this assessment based upon?
The results vary considerably between regions
and are based on economic forecasts for the area, assumptions
on growth, unemployment levels, new developments in employment,
shopping and leisure facilities, etc.
Additionally each bus company is required to
specify specific projects to generate demand. These include, Twin
Track initiatives developed under Quality Partnerships with the
Local Authorities, new Bus Priority and Park & Ride developments,
the exploitation of new buses on which some £100 million
is being spent annually, new service initiatives, etc.
The Rail subsidiaries have developed a programme
of similar initiatives.
(c) Growth Expected
Figures from three year plans:
Great Western 11.7 per cent
Great Eastern 8.8 per cent
North Western Trains 10.0 per cent
Overall growth over three years 5.43 per cent.
See Appendix 1 for further details.
It is not possible to provide meaningful figures
splitting the difference between inter urban and intra urban on
the Group's bus operations. Many services provide a dual role.
In West Yorkshire for example the Group provides many services
between Leeds and Bradford, Leeds and Halifax, Leeds and Huddersfield.
Each service has a complex pattern of usage both inter urban and
intra urban and the cost of research into which passengers fall
into each category could not be justified by any consequential
Similarly, the split between existing and new
users is difficult to assess. However, on enhanced services we
do undertake some market research to assist in developing passenger
For example, growth on the Leeds Superbus Guided
Bus network is now running at 56 per cent as compared with three
years ago. Of this approximately half, i.e., 28 per cent has come
from people who have transferred from cars. This is made up of
both peak-time commuters and shoppers off-peak who now consider
the service to be good enough to avoid taking the car into the
However, this partially stems from the fact
that the Superbus operates into an area of high quality housing,
many two car families and a lower propensity to use the bus. The
next corridor in Leeds where we hope to introduce guided Superbus
services will generate similar levels of growth, but as it is
an area of more mixed housing and Council property, with lower
car ownership levels, we are predicting the split between new
users and existing users in the growth patterns to be significantly
different, with greater generation from existing users travelling
(d) Specific Plans to meet increasing demand
Plans to meet specific demand on bus include:
(i) Twin Track initiatives in Quality Partnership
with Local Authorities to introduce bus priority measures, park
& ride, etc.
This will enable more reliable, more frequent
and attractive services to generate demand and will entail higher
service frequencies and new top quality vehicles.7
The Group has offered to fund 50 per cent
of the total costs of Twin Track schemes.
(ii) Maximum intake of new vehicles which
are more environmentally and passenger friendly with low step
floors for those not good on their feet, wheelchair and baby buggy
accommodation, better heating and ventilation.
(iii) Close monitoring of demand service
by service to ensure provision remains ahead of demand. On Superbus
services in Leeds for example, the service has been augmented
four times in the last three years to meet increased demand.
On Rail, the Group is investing £140 million
over the next three to four years in new trains for both Great
Western and North Western Trains to augment and improve the quality
On Great Western this will be used to augment
London Bristol and London Cardiff services up to half hourly all
day to meet increased demand as envisaged in the Franchise Plan.
On Great Eastern inner London services into
Liverpool Street were doubled from most stations from May
1998 and fast Southend-London services increased from 2 to 3 per
hour to meet demand. London-Ipswich services were substantially
augmented. Similar new initiatives will be continued. New trains
to replace all slam door stock will be introduced in 2001 to augment
and improve the quality of services.
(e) Obstacles to meeting increases in demand.
slow implementation of Twin Track
initiatives due to lack of Government funding for Local Government
elements of the schemes.
traffic congestion hampering service
reliability, more productive use of peak vehicles.
lack of capacity at pinch points
on the network.
limitation of slots available from
Railtrack at key times, i.e., into the London termini.
What assessment have you made of likely future
increase in rail passengers?
Passenger forecasts for Great Western October
1998 business plan give the following growth assumptions.
|Passenger journeys (million)||17.0
|Annual growth (per cent)||2.0
|Cumulative (per cent)||2.0
What research is this based on?
Underlying growth forecasts are based on a detailed econometric
study by Leeds University commissioned by Great Western Trains.
Underlying demand is sensitive to GDP growth forecasts (and commuting
is sensitive to Central London Employment). Train service improvements
are assessed using MOIRA: the recognised industry model. Pricing
resistance is based on Rail industry elasticity research assumptions.
Great Western trains services cater almost exclusively for
inter urban passenger transport markets.
What specific plans do you have for meeting any increases in
Capacity to carry the additional passengers is to be achieved
by the introduction of new build class 180 rolling stock. An initial
build of 40 vehicles to be introduced by Autumn 2000 will be augmented
by a further build of 32 vehicles.
What obstacles are there to meeting any increases in demand?
Deployment of new and existing rolling stock to meet passenger
growth so as to avoid overcrowding will be critically dependent
upon Railtrack providing the necessary train slots, especially
during peak periods.
2. CAR HIRE
(a) Great Western
(i) Great Western has a partnership with Avis to offer Great
Western customers a special RailDrive package. This "Meet
and Greet" service is available from the following Great
Avis car hire is available at any time from these stations
or Great Western customers can use the "Meet and Greet"
service where they are met by an Avis representative during Avis
office hours of 0800-1800 Mondays to Fridays and 0800-1200/1300
on Saturdays. Special discounted rates have been negotiated with
Avis for Great Western customers and members of Great Western's
Merlin Executive Travel Club can obtain complimentary car upgrades.
Delivery of cars is provided free during Avis office hours
(as detailed above). Outside office hours a £20 collection/delivery
charge applies and car keys are left for customers at the ticket
office, travel centre or other safe area depending on the individual
station. Customers are advised of the details at the time of booking.
Booking with Avis is through Avis Central reservations on
(ii) Usage of the RailDrive product has been monitored by
Great Western since its introduction in October 1997. On going
reviews of the RailDrive product and other Great Western products
are conducted to analyse potential for further development, in
this instance, it is not proposed that RailDrive is extended to
involve other stations. Current rentals over the last 12 months
are approximately 50, which represents a very low response to
the product offering.
Potential growth of the car hire market has been monitored
by Great Western through usage analysis and our relationship with
Avis. Avis expect an industry growth of between 3-5 per cent over
the next 12 months, although growth is expected to be towards
the lower level.
(iii) The RailDrive product is reviewed with Avis on a six
monthly basis which involves the provision of car hire facilities
at Great Western stations. As part of the refurbishment of Great
Western stations, car park facilities and station security is
being improved to high customer standard levels. This will impact
on those stations with RailDrive facilities allowing clear signage
and collection facilities for car rentals. Estate management of
Great Western stations is handled by Waters and Company.
(iv) No specific research has been undertaken to determine
the size of the car rental market from Great Western stations.
However, as part of our product development programme research
has been undertaken to determine the likely usage of the RailDrive
product with the key target market for the product.
Research of Great Western's Merlin Executive Travel Club,
which comprises 14,000 First Class business customers, those people
for whom the RailDrive product has been developed and targeted
at, has recently been undertaken (September 1998).
Analysis of this research shows that car rental offers are
of high interest to 20 per cent of respondents, with 40 per cent
showing some interest. These figures indicate that over two thirds
of our target market have shown an interest in car rental products
and can therefore, be targeted for future promotions and product
(b) North Western Trains
Though currently there are no stations operated by First
North Western where it is possible to hire a car, the network
served by First North Western is well provided with such facilities
sponsored by both Virgin and Railtrack.
All the main stations within the operating area have car
hire facilities adjacent, the two Manchester stations and Lime
Street being the major ones.
For First North Western this kind of activity is low on the
list of priorities for our customers who are predominantly commuters,
shoppers and day trippers. In the North West Virgin have undertaken
a number of initiatives with hire/taxi companies which is much
more appropriate to their customer base.
(c) Great Eastern Trains
There are no car hire facilities at Great Eastern stations.
These were tried at a number of locations during the 1980s and
were dropped due to lack of demand which generated substantial
losses. The vast bulk of passengers using Great Eastern services
are regular daily commuters and therefore not a market which is
envisaged to generate demand for car hire facilities.