Rail challenger to take on Labour's nationalised trains
Private train operator Lumo is plotting a range of new services across Britain in a direct challenge to Labour's nationalised rail network.
FirstGroup, which owns the low-cost rail company, is looking to expand operations after already announcing plans to triple Lumo's passenger count to 10m a year with the addition of five new routes.
Graham Sutherland, the chief executive, said FirstGroup is now studying population growth and housebuilding plans to determine where is best to introduce new routes.
However, he said the company is particularly keen to restore direct services to London from small towns across the UK, while it is also exploring the possibility of launching trains between poorly connected regional centres.
He said: 'Obviously it gets harder the further you get through it, but we feel there are other opportunities still to come out over time.
'Anything we are looking at is commercially sensitive. But the basic criteria is do we think there are under-served areas in terms of rail and do we have an opportunity to drive modal shift and get people out of their cars.'
It comes after Labour sent out mixed messages on the continuation of private rail services following the launch of its state-backed railway company, Great British Railways (GBR).
Privatised 'open-access' operators, which are not paid by the Government to run services and make their money only from passenger fares, are due to remain in private hands, according to the blueprint for GBR.
However, Heidi Alexander, the Transport Secretary, wrote to the industry regulator in January advising it to adopt a more rigorous stance on approving open-access applications.
GBR is set to be fully operational by next year.
Meanwhile, The Telegraph revealed last month that LNER, which is already government-run, is predicted to lose out on £1bn in ticket sales to private operators offering cheaper fares.
Mr Sutherland said open access is no threat to the nationalised railway, claiming instead that competition helps to improve standards and attract new customers.
Mr Sutherland added that further routes targeted by Lumo were likely to conform to its existing long-distance model.
FirstGroup currently operates open-access services along the east coast main line from Kings Cross to Edinburgh and Hull via Lumo and sister brand Hull Trains, which it plans to extend to Glasgow and Sheffield respectively.
A further two new routes are guaranteed, one from London Euston to Stirling, in Scotland, and the other from London Paddington to Carmarthen, in south Wales, after FirstGroup bought access rights from Arriva's Grand Union.
FirstGroup has also lodged applications with the Office of Rail and Road to run trains from Euston to Rochdale via Manchester and from Paddington to Hereford and Paignton, Devon.
Should the company succeed in expanding to all seven routes, its open-access revenue should jump from £106m to around £300m, Mr Sutherland said.
FirstGroup's South Western Railway became the first to be seized by Labour last month and will be followed by its remaining Avanti West Coast and Great Western franchises.
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