Calendar An icon of a desk calendar. Cancel An icon of a circle with a diagonal line across. Caret An icon of a block arrow pointing to the right. Email An icon of a paper envelope. Facebook An icon of the Facebook "f" mark. Google An icon of the Google "G" mark. Linked In An icon of the Linked In "in" mark. Logout An icon representing logout. Profile An icon that resembles human head and shoulders. Telephone An icon of a traditional telephone receiver. Tick An icon of a tick mark. Is Public An icon of a human eye and eyelashes. Is Not Public An icon of a human eye and eyelashes with a diagonal line through it. Pause Icon A two-lined pause icon for stopping interactions. Quote Mark A opening quote mark. Quote Mark A closing quote mark. Arrow An icon of an arrow. Folder An icon of a paper folder. Breaking An icon of an exclamation mark on a circular background. Camera An icon of a digital camera. Caret An icon of a caret arrow. Clock An icon of a clock face. Close An icon of the an X shape. Close Icon An icon used to represent where to interact to collapse or dismiss a component Comment An icon of a speech bubble. Comments An icon of a speech bubble, denoting user comments. Comments An icon of a speech bubble, denoting user comments. Ellipsis An icon of 3 horizontal dots. Envelope An icon of a paper envelope. Facebook An icon of a facebook f logo. Camera An icon of a digital camera. Home An icon of a house. Instagram An icon of the Instagram logo. LinkedIn An icon of the LinkedIn logo. Magnifying Glass An icon of a magnifying glass. Search Icon A magnifying glass icon that is used to represent the function of searching. Menu An icon of 3 horizontal lines. Hamburger Menu Icon An icon used to represent a collapsed menu. Next An icon of an arrow pointing to the right. Notice An explanation mark centred inside a circle. Previous An icon of an arrow pointing to the left. Rating An icon of a star. Tag An icon of a tag. Twitter An icon of the Twitter logo. Video Camera An icon of a video camera shape. Speech Bubble Icon A icon displaying a speech bubble WhatsApp An icon of the WhatsApp logo. Information An icon of an information logo. Plus A mathematical 'plus' symbol. Duration An icon indicating Time. Success Tick An icon of a green tick. Success Tick Timeout An icon of a greyed out success tick. Loading Spinner An icon of a loading spinner. Facebook Messenger An icon of the facebook messenger app logo. Facebook An icon of a facebook f logo. Facebook Messenger An icon of the Twitter app logo. LinkedIn An icon of the LinkedIn logo. WhatsApp Messenger An icon of the Whatsapp messenger app logo. Email An icon of an mail envelope. Copy link A decentered black square over a white square.

FirstGroup shares plunge after UK Government acts on poor rail performance

The Aberdeen-based transport giant says it is 'disappointed'

TransPennnie Express train on railway station platform
Aberdeen-based FirstGroup has been running TransPennine Express trains for nearly 20 years. Image: Danny Lawson/PA Wire

Shares in FirstGroup fell nearly 8% today after the UK Government said the transport firm’s key TransPennine Express (TPE) franchise will not be renewed after it ends later this month.

The FTSE 250 shares staged a partial recovery to end the day nearly 5% lower at 117.4p.

An “operator of last resort” will be appointed by the Department for Transport (DfT) to run the network, which has been plagued by cancellations, from May 28.

It means a raft of intercity trains operating across the north of England and into Edinburgh and Glasgow will become state-owned, at least for a spell.

Aberdeen-based FirstGroup has run TPE under its current franchise since April 2016.

But it has been involved in running the trains, either on its own or with partners, since February 2004.

Our team have worked extremely hard to improve services.”

Graham Sutherland, chief executive, FirstGroup

The company said it was “disappointed” the contract will not be renewed after May 28.

Chief executive Graham Sutherland said: “We have operated TransPennine Express and its forerunners since 2004, and are very proud to have served the communities across northern England and into Scotland, carrying millions of passengers and introducing new trains, new routes and more seats for our customers.

A "Welcome to Liverpool" message on one of the TPE trains serving Liverpool as the city prepares to host the Eurovision Song Contest. Image: TransPennine Express/PA Wire
A “Welcome to Liverpool” message on one of the TPE trains serving Liverpool as the city prepares to host the Eurovision Song Contest. Image: TransPennine Express/PA Wire

“Our team have worked extremely hard to improve services, including by recruiting and training more drivers than ever before.

“We have also worked closely with the DfT and Transport for the North ( a public-private sector partnership south of the border) on an agreed recovery plan as well as an improved offer on overtime working for our drivers.”

FirstGroup chief executive Graham Sutherland. Image: FirstGroup

Mr Sutherland added: “Today’s decision does not alter our belief in the important role of private rail operators in the delivery of vital, environmentally-friendly transport for customers and communities across the UK.”

TPE contributed £415.8 million of revenue to FirstGroup’s total of nearly £4.6 billion last year, as well as £13.2m of adjusted operating profits.

But performance across the network deteriorated, which FirstGroup said was due to circumstances “not wholly” within its control. It cited challenging industrial relations, including the withdrawal of “longstanding, industry-standard overtime arrangements”.

‘Unprecedented’ training requirments

The company also highlighted “unprecedented driver training requirements due to infrastructure upgrades”.

It added: “Following the introduction of an agreed recovery plan in February 2023, cancellations have fallen by approximately 40% and will continue to do so as more drivers become available over the next few months.”

Explaining its decision, DfT said it followed “months of significant disruption and regular cancellations”.

This has led to a “considerable decline in confidence for passengers who rely on the trains to get to work, visit family and friends and go about their daily lives”, it added.

A TransPennine train on the platform at Cleethorpes.
A TransPennine train on the platform at Cleethorpes.

The department went on: “It has been decided that to achieve the performance levels passengers deserve, and that the northern economy needs, both the contract and the underlying relationships must be reset.”

But the DfT insisted the move to transfer TPE to its operator of last resort was temporary.

“It is the government’s full intention that it will return to the private sector,” it added.

Minister says passenger experience ‘must come first’

Calling for an end to a wave of rail strikes and the disruption they cause, Transport Secretary Mark Harper said : “Passenger experience must always come first.

“This is not a silver bullet and will not instantaneously fix a number of challenges.”

FirstGroup runs buses and trains throughout the UK. These operations carried more than 1.4 million passengers daily in 2021-22.

Conversation