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 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 ex- offenders 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 on- train 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 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 half- hourly 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