FirstGroup trumps Virgin as frontrunner for WCML franchise (guardian 29/07/2012)

[whole diary]

[bobm]

I don't see why when you have bought a First Class ticket you should pay even more for food. I certainly would not travel 1st in FGW^▸ (First Great Western) unless there were some cheap advances.

I have said it on another thread.  I'd rather have to pay for food and then have the choice of whether I want it or not as well as having more of a say if it wasn't up to scratch.  As for cheap 1st class advances on FGW - how about ^33 return from Reading to Cheltenham Spa? 

[JayMac]

Since EC introduced it, revenue is up (because of the promotions) with the result that the carriages are not longer empty, freeing up seats in standard.

Fixed that for you!

[Btline]

Since EC introduced it, revenue is up (because of the promotions) with the result that the carriages are not longer empty, freeing up seats in standard.

Fixed that for you!

I'd say that more passengers in First Class, lower 1st fares, and better 1st service is a good thing if REVENUE has gone up!

[Trowres]

Isn't there anything more important than catering in first class depending upon the outcome of this franchise award? 

[SapperPsmith]

Since EC introduced it, revenue is up (because of the promotions) with the result that the carriages are not longer empty, freeing up seats in standard.

Fixed that for you!

The statement by East Coast is very disingenuous - They havnt said how much additional revneue they have gained from the offer.  I suspect that they are selling lots of cheap FCOP (First Class Off Peak) to fill the space but the total revenue is not covering the additional cost or paying for the massive investment (I hear they spent millions on catering depots). 

I have spent a lot of time over the last ten years dealing with the economics of on-board catering and I am not aware of any catering offer which makes money.  I love the idea of great train catering and have spent happy hours dining whist watching the view but members of this forum must recognise that this takes revenue away from the rest of the railway.

Remember the Virgin offer was introduced because the First Class customers were in uproar due to the abysmal service they were recieving pre Pendolino and PUG2.  Customers were driving to stations on the ECML^▸ (East Coast Main Line) and paying for their catering.

[bobm]

I have spent a lot of time over the last ten years dealing with the economics of on-board catering and I am not aware of any catering offer which makes money.  I love the idea of great train catering and have spent happy hours dining whist watching the view but members of this forum must recognise that this takes revenue away from the rest of the railway.

That last sentence is interesting but doesn't bear out my experience.

Take the next two weeks for example.  On two occasions I am catching trains specifically because they are Pullman Restaurants.  In both cases me and a friend are travelling First Class because we want to ensure we get a seat in the restaurant.  If it wasn't for the catering we would probably travel out of peak times and probably use standard class for one of the journeys and not travel at all on the second occasion.  It is the restaurant which has drawn us to the train.  So in addition to the higher fares FGW^▸ (First Great Western) also get the price of four meals out of me.  They will also get custom from us on Travelling Chefs on the respective return journeys.

There has been mention elsewhere on this forum about additional Travelling Chefs and Pullmans.  Why would these be considered if there was no commercial sense in them - maybe they do not cover their costs on the basis of money taken in Coach F but perhaps when taken as part of the overall offering they do increase the numbers travelling?

[SapperPsmith]

I have spent a lot of time over the last ten years dealing with the economics of on-board catering and I am not aware of any catering offer which makes money.  I love the idea of great train catering and have spent happy hours dining whist watching the view but members of this forum must recognise that this takes revenue away from the rest of the railway.

That last sentence is interesting but doesn't bear out my experience.

Take the next two weeks for example.  On two occasions I am catching trains specifically because they are Pullman Restaurants.  In both cases me and a friend are travelling First Class because we want to ensure we get a seat in the restaurant.  If it wasn't for the catering we would probably travel out of peak times and probably use standard class for one of the journeys and not travel at all on the second occasion.  It is the restaurant which has drawn us to the train.  So in addition to the higher fares FGW^▸ (First Great Western) also get the price of four meals out of me.  They will also get custom from us on Travelling Chefs on the respective return journeys.

There has been mention elsewhere on this forum about additional Travelling Chefs and Pullmans.  Why would these be considered if there was no commercial sense in them - maybe they do not cover their costs on the basis of money taken in Coach F but perhaps when taken as part of the overall offering they do increase the numbers travelling?

However consider the annual cost of the rolling stock lease, maintenance, track access and then add the staff and other costs and the numbers dont stack up.  I have never seen evidence that the service adds enough additional passengers (who would travel by another mode) to make money.  With modern yeild managment the majority of fares are discounted and although this increases the total revenue it means that provision of other on-board services will not make money.  Four meals (avg of ^20?) - additional income ^80?  IF FGW are achieving 50% gross margin after cost of goods sold then they are taking ^40 to pay for the staff , the seat (if dining is provided in a dedicated separate area), the rolling stock etc etc.

[Btline]

If restaurants were profitable they wouldn't have been axed across the network. Look at W&S^▸ (Wrexham and Shropshire (Open Access Operator)) - it failed.

People can't afford (even in non recession times) to shell out for a 1st class ticket and then pay even more for the food.

FGW^▸ (First Great Western) are probably keeping the token service to avoid the outcry that surrounded other restaurants when they collapsed. Any new ones are probably to make the chef actually do something in the other direction.

[matt473]

If restaurants were profitable they wouldn't have been axed across the network. Look at W&S^▸ (Wrexham and Shropshire (Open Access Operator)) - it failed.

People can't afford (even in non recession times) to shell out for a 1st class ticket and then pay even more for the food.

FGW^▸ (First Great Western) are probably keeping the token service to avoid the outcry that surrounded other restaurants when they collapsed. Any new ones are probably to make the chef actually do something in the other direction.

The restaurant and travelling chef however are not exclusive to first class which is a benefit to all. If the restaurant was not profitable then of course they would not exist. If you look however, numerous travelling chef services happen to be the named services which are no doubt busy and benefit from extra catering provisions. Being optional however allows staff to only focus food on what is ordered instead of providing anything to satisfy complimentary offerings. Have you by any chance used the travelling chef on fgw? Previously I have travelled I have had a first class ticket and food from the chef for ^15 whilst travelling Bristol to Swansea which is amazing value with many people also taking up the opportunity to use the chef on board too. It works out cheaper than purchasing food from other outlets sometimes and more convenient making paid for offerings on board highly attractive to both TOC^▸ (Train Operating Company) and passangers if ran correctly. People can and do afford the service, however I admit that there is a perception that it is expensive and portions are lacking which when people try the service though realise is not the case.

[bobm]

FGW^▸ (First Great Western) are probably keeping the token service to avoid the outcry that surrounded other restaurants when they collapsed. Any new ones are probably to make the chef actually do something in the other direction.

I am not aware of any current FGW services where a Chef rides on the cushions in one direction.  Both the Pullmans are self contained - the Chef either works the 12:00 ex Ply and the 18:03 ex Pad or the 12:55 ex Ply and 19:03 ex Pad.  As for the Travelling Chefs looking at the timetable you can see how the staff work one way, have a break and work back again.

If restaurants were profitable they wouldn't have been axed across the network. Look at W&S^▸ (Wrexham and Shropshire (Open Access Operator)) - it failed.

People can't afford (even in non recession times) to shell out for a 1st class ticket and then pay even more for the food.

FGW are probably keeping the token service to avoid the outcry that surrounded other restaurants when they collapsed. Any new ones are probably to make the chef actually do something in the other direction.

The restaurant and travelling chef however are not exclusive to first class which is a benefit to all. If the restaurant was not profitable then of course they would not exist. If you look however, numerous travelling chef services happen to be the named services which are no doubt busy and benefit from extra catering provisions. Being optional however allows staff to only focus food on what is ordered instead of providing anything to satisfy complimentary offerings. Have you by any chance used the travelling chef on fgw? Previously I have travelled I have had a first class ticket and food from the chef for ^15 whilst travelling Bristol to Swansea which is amazing value with many people also taking up the opportunity to use the chef on board too. It works out cheaper than purchasing food from other outlets sometimes and more convenient making paid for offerings on board highly attractive to both TOC^▸ (Train Operating Company) and passangers if ran correctly. People can and do afford the service, however I admit that there is a perception that it is expensive and portions are lacking which when people try the service though realise is not the case.

Totally agree - you can have a cooked breakfast with all the trimmings for ^8.35 (or ^9.95 if you want porridge to start with!).

However consider the annual cost of the rolling stock lease, maintenance, track access and then add the staff and other costs and the numbers dont stack up.  I have never seen evidence that the service adds enough additional passengers (who would travel by another mode) to make money.  With modern yeild managment the majority of fares are discounted and although this increases the total revenue it means that provision of other on-board services will not make money.  Four meals (avg of ^20?) - additional income ^80?  IF FGW are achieving 50% gross margin after cost of goods sold then they are taking ^40 to pay for the staff , the seat (if dining is provided in a dedicated separate area), the rolling stock etc etc.

I am not sure that rolling stock lease, maintenance and track access are relevant as the trains run anyway - the Pullman does not involve the use of extra rolling stock.  Also I don't believe ^20 per head is the right figure based on my experience, but then perhaps I am a glutton!  .  I average ^40 per head once alcohol is involved!

[vacman]

If restaurants were profitable they wouldn't have been axed across the network. Look at W&S^▸ (Wrexham and Shropshire (Open Access Operator)) - it failed.

well that contradicts your own arguement, the meals on W&S were free to first class!

[readytostart]

Most staff that Virgin have taken on in the last year or so have been on fixed term contracts, along with some who are permanent but on 12 hour contracts but working full time hours. All this screams that Virgin have a reduced catering vision up their sleeve, even as a back-up plan. No staff would get sacked, just come to the end of their contract or only be given their contracted hours.

[Btline]

If restaurants were profitable they wouldn't have been axed across the network. Look at W&S^▸ (Wrexham and Shropshire (Open Access Operator)) - it failed.

well that contradicts your own arguement, the meals on W&S were free to first class!

W&S were offering restaurant quality service as opposed to a complimentary offer. It wasn't profitable, probably the mean reason the TOC^▸ (Train Operating Company) folded.

[Southern Stag]

The fares were also very low in First Class though. FGW^▸ (First Great Western) charge a fair price for the Pullman restaurants, but it is very good quality food. I very much doubt the First Class catering offer was why W&S^▸ (Wrexham and Shropshire (Open Access Operator)) folded though, it was the slow, unattractive journey times and the lack of custom because of that the caused them to fold. If they had been allowed a Wolverhampton and Birmingham stop once moderation of competition ended the ORCATS^▸ (Operational Research Computerised Allocation of Tickets to Services) revenue may have saved them.

[grahame]

If they had been allowed a Wolverhampton and Birmingham stop once moderation of competition ended the ORCATS^▸ (Operational Research Computerised Allocation of Tickets to Services) revenue may have saved them.

I'm just checking I have read that correctly ... ORCATS (Operational Research Computerised Allocation of Tickets to Services) remains in place, right?   Are you referring to a general modernisation here which effects / will effect the GW^▸ (Great Western) area, or some specific Birmingham stuff?

Within the next franchise, how farebox revenue is distributed amongst multiple operators on certain sections of line and how the fares are set and allowed flexibility could make a huge difference to the bids - both in terms of bottom line and services suggested, bid and provided.