First Group to run Edinburgh to London budget rail service
A new budget rail service between Edinburgh and London has been given the green light by the Rail Regulator.
The 10-year deal will allow First Group to operate five trains a day each way via intermediate stations at Stevenage, Newcastle and Morpeth from 2021.
It said average fares would be less than £25 and there would be only one class of carriage.
Stagecoach, which operates Virgin Trains East Coast on the same rails, has warned its revenue will be harmed.
Virgin Trains East Coast (VTEC) currently holds the franchise to run services on the line until at least March 2023.
The Office of Rail and Road (ORR) regulator has now granted approval for FirstGroup to launch open access services between London, north-east England and Edinburgh from 2021.
Perth-based Stagecoach Group - which owns 90% of VTEC - criticised the decision to allow FirstGroup to run competing services.
In a statement, Stagecoach chief executive Martin Griffiths said that open access competition with an established franchise was not in the interests of passengers or taxpayers.
He said it would assess the ruling from the ORR in detail, and "consider its options".
Virgin Trains East Coast has also won permission to increase its services on the line and its branches between Edinburgh and London, effective from May 2019 at the earliest and by May 2021.
It is also to boost services linking Bradford, Lincoln, Harrogate and Middlesbrough.
Tim O'Toole, chief executive of FirstGroup, said: "Our brand new trains will be cheaper than other rail services, greener than the plane, quicker than the coach and will get passengers from London to Edinburgh earlier than they can arrive now, and all for an average fare for less than £25."
ORR said the new services would give passengers more choice and provide more frequent trains to under-served towns and cities.
The regulator's director of railway markets and economics, John Larkinson, said: "Our decision has been informed by extensive analysis, formal industry hearings and detailed engagement with all parties.
"We have carefully weighed up the potential passenger benefits and the financial impacts on existing operators and the government, as we are required to do by law."