National Express to sell c2c franchise to Trenitalia, quitting UK rail
National Express has reached a provisional agreement with Trenitalia for the Italian rail company to acquire the c2c franchise, while not ruling out its return to bid for future UK rail franchises.
The acquisition, expected to cost Trenitalia in the region of £70m, is dependent upon the final consent of the DfT and is expected to occur by mid-February as National Express looks to focus on growing its North American and continental European markets.
The move effectively means National Express will be quitting the UK rail market as c2c was its sole remaining franchise.
The transaction also marks a small net profit for the organisation, which transformed c2c to make it the UK’s most consistently best performing rail franchise, currently holding the records for annual and four-weekly punctuality.
The decision was praised by Dean Finch, CEO of National Express, who said that the operator was “immensely proud” of c2c’s transformation under its watch, including its becoming the first UK rail service to offer automatic delay compensation for smartcard customers and flexi-season tickets.
“While this has, therefore, not been an easy decision, the board believes the transfer of c2c to Trenitalia UK presents opportunities for all concerned,” Finch added.
“We have been impressed by the commitment and interest shown by Trenitalia and are grateful for the support shown by DfT in this process. Trenitalia has significant rail credentials and is excited by the opportunity to invest in the new agenda set out by the secretary of state.
“For National Express, while not ruling out participating in future UK rail bids, this allows us to pursue further growth opportunities in the markets where we have seen strong returns in the recent years.”
The acquisition marks the first step in Trenitalia’s plans to expand in the UK rail franchise market, in line with the internationalisation plans of its parent group FS Italiane.
The company became the first new entrant to be awarded a pre-qualification questionnaire (PQQ) passport by the DfT in December 2015, enabling it to participate in rail franchising competitions. It is understood to be pursuing a number of franchise opportunities beyond today’s deal.
The Italian operator has stressed that it will retain c2c’s existing management, staff and strategy plans while investing in further improvements in the franchise.
“We see significant chances to invest in UK rail and this in principle agreement with National Express allows us to foster these ambitions. This is why we are extremely delighted to have this exciting opportunity to run the UK’s consistently best performing railway and serve the people of east London and south Essex,” said Barbara Morgante, CEO of Trenitalia.
“We will work closely with customers and local stakeholders to apply our vision and deliver improvements that will be visible and valuable; we are confident that British customers will benefit from our skill and capabilities developed in the highly competitive Italian market.”
c2c currently operates services between Fenchurch Street and Shoeburyness, serving 26 stations in East London and South Essex. The franchise was named London’s best commuter operator in the Which? magazine's survey of rail companies in 2012.
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