STAGECOACH-VIRGIN COMPANY AWARDED INTERCITY EAST COAST RAIL FRANCHISE

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1 27 November 2014 STAGECOACH-VIRGIN COMPANY AWARDED INTERCITY EAST COAST RAIL FRANCHISE 140m planned investment to deliver an improved service and more personalised travel Over 25m planned spend in improving stations and car parking New trains and faster more frequent services Investment in staff with more training and new dedicated innovation council New technology to improve customer experience on-board and at stations Stagecoach Group ( Stagecoach ) today (27 November 2014) welcomed the announcement by the Department for Transport ( DfT ) of its intention to award the Inter City Railways ( ICR ) venture with Virgin Group ( Virgin ) the InterCity East Coast ( ICEC ) rail franchise which will bring major benefits to passengers, taxpayers and employees. Passengers can look forward to new services, faster and more frequent journeys whilst taxpayers will benefit from significant increases in premium payments to Government over the course of the eight year franchise. The groups venture, ICR, will transform the customer experience for around 20 million journeys a year on one of the UK s major inter-city rail routes, blending the experience, culture and service-focus of both Stagecoach and Virgin. Stagecoach holds 90% of the share capital of ICR and Virgin holds the remaining 10%. The new franchise will start in March 2015 and is planned to run until 31 March 2023, with the option for a one-year extension at the DfT s discretion. It includes a commitment to deliver 2.3bn* in real terms in premium payments to the Government between 2015 and 2023, providing a higher return to the taxpayer than under the current arrangements. The franchise is set to see more than 140m invested in delivering an improved service and a more personalised travel experience for passengers. Trains will operate under the Virgin Trains East Coast brand. Highlights for customers include: Faster journey times regular services to Leeds in two hours and Edinburgh in four hours New trains 65 new Super Express trains from 2018 with an early multi-million-pound train refresh programme for existing fleet Better connections extra and new direct services to London from key locations in Scotland and England and more weekend services More services a 50% increase in capacity by 2020 with total fleet capacity increased by 12,200 seats Better value fares 10% cut in Standard Anytime fares on long-distance journeys to and from London and Stevenage Investment in people a fresh approach to recruitment, including new apprenticeships and the introduction of a new National Academy for Rail Professional Education with bases in York, Derby and London. Major investment in staff development and training, a new innovation council and giving employees ways to own a share of the business through employee share incentive arrangements New technology new website, smartphone apps, interactive touchscreen information points at major stations, portable technology for staff, free WiFi on trains and stations. Personalised travel journeys built around individual customers, with at-seat food ordering, simpler ticket purchase and reservations, new Nectar loyalty programme 1

2 Improved customer rights and support new Passengers' Charter with easier and faster compensation for customers through automated delay repay service; commitment to improved satisfaction scores with new independent passenger surveys, benchmarks and published results to drive satisfaction with stations, trains and customer service; and a dedicated customer and communities improvement fund Station enhancements planned investment of over 25m in stations and car parks with new open plan customer zones introduced for combined ticket purchase and information, more car parking spaces, extra cycle facilities and improved security Improved accessibility investment in disability improvements, including induction loop and tactile station maps Community engagement apprenticeships for young people, graduate and exoffenders programmes, dedicated communities fund, support for small businesses and regeneration in disadvantaged areas. Martin Griffiths, Chief Executive of Stagecoach Group, said: Passengers using the East Coast mainline will benefit from hundreds of millions of pounds of infrastructure investment and service improvements over the next decade. Together with Virgin, our innovative plans will give customers new services, faster and more frequent trains, and easier, more personalised journeys. "We will be investing in the committed East Coast people who will be joining our team, as well as delivering major programmes to help young people, communities and small businesses along one of Britain's most important routes. We will match world-class customer service by giving a big boost to taxpayers with increased payments to Government. Patrick McCall, Senior Partner, Virgin Group, said, We re delighted to have been chosen to run the East Coast franchise. Our long term partnership with Stagecoach has seen a revolution in customer service standards, great product innovation, reduced journey times and improved timetables on the West Coast mainline. We plan to deliver similar success on the East Coast and are looking forward to working with the team there to build on their achievements. Our partnership will concentrate on areas for which Virgin is famous, such as looking after our customers and our people. We have a great opportunity to blend the successes of the East Coast and the West Coast lines to create a great experience for all. Together with these new ideas and initiatives, passengers will begin to see those Virgin touches on each and every journey. Detailed plans to transform services for InterCity East Coast passengers include: New, improved trains and enhanced on board service 65 new Super Express trains introduced from 2018 delivering a new standard of ontrain service with free WiFi and at seat meals for all passengers 13.4m planned spend in the first two years of the franchise to improve the existing train fleet. An initial deep clean of the entire fleet, with refurbished toilets, new carpets and seat covers, new and clearer on-train signage, plus other enhancements. Faster, more reliable on-board WiFi and better mobile phone connections "Luggage Hubs providing an airline style approach with a secure storage area on long distance train services where customers can leave their bags during their journey. More flexible reservation system allowing reservations to be made closer to departure to better suit customers who make last minute travel arrangements 2

3 Innovative new mobile app that allows customers to order a meal at their seat before or during their journey Improved on-board service with additional presence in standard class and train-side to deliver a personalised and highly visible service. New, improved on-train catering designed by local chefs with menu changed regularly to include seasonal events. Bean to cup coffee introduced and passengers able to claim Nectar points on all Foodbar purchases Better journeys, extra services and improved punctuality Additional and new direct services to London from Sunderland and Stirling within first year of new franchise (December 2015) Extra weekday services between Edinburgh and London from May 2016 with halfhourly frequency for most of the day and an additional Sunday service Vastly improved timetable introduced from May 2019 featuring faster services, new direct services and improved weekend services o Regular weekday services between Edinburgh and London in just 4 hours, calling only at Newcastle, a journey time improvement of around 20 minutes compared with most of the fastest trains today o Additional and faster services between Leeds and London, many with a journey time under or close to 2 hours, a journey time improvement of over 10 minutes compared with today o New direct weekday services between Middlesbrough and London for the first time in a generation o Two-hourly direct weekday services between Bradford, Harrogate, Lincoln and London o New direct weekday peak-time services between Huddersfield and London o Improved Saturday and Sunday timetables, with more trains and faster services between Leeds and London, faster journey times between Edinburgh, Newcastle and London, a two-hourly direct service between Harrogate and London, and a two-hourly direct service between Lincoln and London More reliable trains, using our experience from East Midlands Trains, the UK s most reliable long distance train operator New integrated control centre launched with Network Rail to drive up performance Station enhancements Over 25m is set to be invested in station and car parking improvements to transform the end to end journey experience and provide a welcoming, modern and personalised service for customers: Increased staff visibility in new customer friendly open plan areas for combined ticket purchase, information and assistance. Free WiFi introduced at all InterCity East Coast stations Over 500 additional car parking spaces Investment in better station retail and waiting facilities 50% increase in station cycling storage with three new secure cycle compounds and Brompton Dock Cycle Hire facilities Upgrade of First Class lounges and the introduction of a new scheme allowing local businesses and community groups to use selected lounges free of charge during the evenings First Lounge Hosts provided in the lounges at Kings Cross, Leeds, Edinburgh and Newcastle stations to provide a better level of service for customers 3

4 Accessibility, improved transport integration and sustainability measures Investment in station accessibility improvements including induction loops, improved seating, handrails and tactile station maps Introduction of a car-club and station car-sharing schemes with dedicated websites Targeted 20% reduction in passenger and vehicle CO2 emissions and 22% reduction in water consumption Installation of new energy efficient lighting at stations and in car parks Carbon reduction plan with introduction of an eco-driving system, and improved metering and monitoring Fares and ticketing Standard Anytime fares on long-distance journeys to and from London and Stevenage reduced by 10% from May 2015 New booking tool launched to make it easier for customers to book the best value tickets and find the perfect seat to meet their needs New partnership with Nectar, the UK's leading coalition loyalty scheme, allowing customers to collect points and also redeem them against their travel with ICEC, a rail industry first Investment in people Major investment in developing people skills and a commitment to achieving Investors in People Gold status. New Ideal Customer Experience development programme that will build on the great skills East Coast people already have and help drive customer service to new highs Introducing a new National Academy for Rail Professional Education (NARPE) with bases in York, Derby and London Industry leading package of rewards and benefits introduced for staff to improve lifestyle, health and well-being New Innovation Council launched with a dedicated budget, with representation from front-line staff to evaluate, prioritise and develop ideas A reinvigorated recognition programme that rewards people who go out of their way to help their customers Red Track Graduate Training Programme Customer service initiatives and improvements A new customer service strategy has been created to completely transform the passenger experience and is focussed on understanding the needs and wants of customers. A new Passengers' Charter with easier and faster compensation for customers through automated delay repay service; commitment to improved satisfaction scores with new independent passenger surveys, benchmarks and published results to drive satisfaction with stations, trains and customer service; and a dedicated customer and communities improvement fund. Dedicated Customer Experience Board with 1m annual budget to invest in customer service initiatives. Introduction of 30 dual role Security and Revenue Officers who are also attested as special constables to provide safer travel for customers Customer information A new website and app offering real-time personalised travel information New electronic information boards at stations with interactive touchscreens at key locations providing up-to-the minute information for customers including a map of station facilities, onward transport information and customer service contact information 4

5 New station customer action teams to help provide extra customer service during times of disruption Investment in hand held smart technology for staff for better customer support and information provision Community engagement and stakeholder relations New apprenticeship schemes launched in partnership with local authorities targeting year olds New schools partnership to provide opportunities for young people and an extended range of traineeships for year olds. Job trials scheme offering opportunity for young and unemployed people on the East Coast route with a guaranteed job interview at the end Unique partnership with Bad Boys Bakery to support ex offenders and prevent reoffending by getting people into good jobs. New customer and communities fund to provide opportunities for commercial, local community and meeting spaces at stations ENDS * The committed premium payments of 2.3bn represents the forecast premium payments over the core franchise period to 31 March 2023, expressed in 2014/15 prices and discounted using the UK Government s real discount rate of 3.5% per annum. Actual premium payments are subject to change in accordance with the contractual arrangements. For further information, please contact: Stagecoach Group plc Media Stagecoach: Steven Stewart, Director of Corporate Communications Emma Knight, Group Head of Media Virgin Group: Nick Fox, Director of External Relations, Virgin Management Richard Scott, Director of Corporate Affairs, Virgin Rail Group Notes to Editors Stagecoach Group Stagecoach Group is a leading international public transport group, with extensive operations in the UK, continental Europe, the United States and Canada. The Group employs around 35,000 people, and operates bus, coach, train, and tram services. Stagecoach is one of the UK s biggest bus and coach operators with around 8,300 buses and coaches. Around 2.8 million passenger journeys are made on Stagecoach's buses every day on a network stretching from south-west England to the Highlands and Islands of Scotland. The Group s business includes major city bus operations in London, Liverpool, Newcastle, Hull, Manchester, Oxford, Sheffield and Cambridge. Low-cost coach service, megabus.com, operates a network of inter-city services across the UK and continental Europe. 5

6 Stagecoach is a major UK rail operator, running the South West Trains, Island Line and East Midlands Trains networks. It has a 49% shareholding in Virgin Rail Group, which operates the West Coast rail franchise. Stagecoach also operates the Supertram light rail network in Sheffield. In North America, Stagecoach operates around 2,400 buses and coaches in the United States and Canada. Megabus.com links around 130 key locations in North America. Stagecoach is also involved in operating commuter, transit, contracted, charter and sightseeing services. Virgin Group Virgin is a leading international investment group and one of the world's most recognised and respected brands. Conceived in 1970 by Sir Richard Branson, the Virgin Group has gone on to grow successful businesses in sectors including mobile telephony, travel & transportation, financial services, leisure & entertainment and health & wellness. It has a 51% shareholding in Virgin Rail Group, which operates the West Coast rail franchise. 6