FirstGroup inks £500m train lease deal to bolster open-access operations

(Sharecast News) - FirstGroup announced a £500m lease agreement with Angel Trains and Hitachi Rail for 14 new five-car class 80X high-speed trains on Friday, to support its open-access rail operations. The FTSE 250 passenger transport operator said the agreement, covering a 10-year lease and maintenance period, also included an option to lease up to 13 additional trains pending regulatory approvals.

Manufactured by Hitachi at its County Durham facility, the new fleet would consist of electric, battery-electric, and bi-mode trains in the 80X family - the series of intercity express trains developed to replace older British Rail-era High Speed Trains.

FirstGroup said production would secure local jobs and contribute to the skills base at Hitachi's Newton Aycliffe site, with delivery of the trains expected to start in late 2027.

The new trains would be deployed on FirstGroup's open-access services, including the recently announced London-Carmarthen route, and would expand capacity on its existing Lumo and Hull Trains services.

The agreement aligned with the group's strategic goal of materially increasing its open-access operations as DfT-managed contracted services fell back into state ownership under the Labour government.

Labour's renationalisation of the railways is only set to include the 'franchised' services - those currently operated under an agreement with the Department for Transport, with open-access operators to still operate alongside the renationalised services.

Existing open-access operators on the UK network include FirstGroup's Hull Trains and Lumo, as well as Grand Central, operated by Arriva UK.

Heathrow Express services are also run under open-access arrangements, with FirstGroup currently operating those under an agreement between its subsidiary Great Western Railway and Heathrow Airport Holdings.

FirstGroup also currently operates three franchises - Great Western Railway, South Western Railway and Avanti West Coast - owning 100% of GWR and 70% of SWR and Avanti.

Earlier this week, it was revealed that SWR would be the first franchise to be renationalised under the new regime, when its current contract expires next May.

Avanti's contract with the DfT is due to expire in 2026, while GWR's current agreement extends to 2028.

FirstGroup also revealed plans to use additional trains, if leased, to support a range of proposed new services.

Those would include a Lumo route between London and Rochdale, an extension of the Lumo service between Glasgow and Edinburgh, and new routes connecting London with Paignton and Sheffield.

"The introduction of our new service between London and Carmarthen, and the extra capacity on Lumo and Hull Trains, will significantly increase our open access portfolio over the next few years, with further expansion possible should our recent applications be successful," said FirstGroup chief executive officer Graham Sutherland.

"The new trains, to be manufactured for us in County Durham by Hitachi, will support UK manufacturing and offer customers more choice as they consider affordable, environmentally friendly modes of travel in the future, and we are pleased to be taking them forward."

Sutherland said growth and innovation were "key" for the future of the railway sector, adding that FirstGroup was "committed" to working with the government and its partners to provide "competitive, sustainable and improved" services.

"Successful open access services can provide new connections, add capacity, support local businesses and suppliers, secure jobs and help to drive social mobility and future economic growth."

At 1245 GMT, shares in FirstGroup were up 1.41% at 156.98p.

Reporting by Josh White for Sharecast.com.