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Author Topic: Fares - down to get passengers but then bounce up?  (Read 1513 times)
grahame
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« on: May 06, 2020, 09:38:31 pm »

From The BBC

Quote
Air fares should fall when flights restart but then rise by at least 50%, warns a global airline industry body.

Airlines are keen to get planes back in the skies quickly which could lead to over-capacity, says the International Air Transport Association (Iata).

With passenger demand likely to remain low this should put pressure on carriers to reduce the cost of flights.

But if airlines are forced to keep middle seats free they will need to raise air fares significantly.

Under current social distancing proposals, airlines may be required to keep middle seats free which would have a major impact on their profitability, as they would be forced to fly with fewer passengers. Michael O'Leary, the boss of Ryanair, said keeping middle seats empty was "idiotic".

That's an airline story ... posting in fare's fair though because ...

Someone asked the question the other day "If we even out the peaks because of staggered start times, do we still need peak fares?". Interesting question - but should the question be "If we don't have peaks any more, do we simplify just to anytime tickets?"

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Robin Summerhill
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« Reply #1 on: May 07, 2020, 11:47:19 am »

That was me who posed that question.

We live in interesting times. It makes no difference is essence whether public transport is privately owned or state owned, at the end of the day it has to cover the cost of providing it, and ideally make a little extra for the shareholders or the Treasury. The price of anything, be it a rail ticket or an airline ticket or a can of peas in Sainsburys, cannot exceed the amount that people are willing to pay for it. If it does, the product stays in the virtual ticket rack or on the shelves.

There may well be a case from a railway perspective of abolishing peak and off peak fares, and just charging one rate as it used to be in the old days. However, if that route is gone down, then the fare charged will still need to be one that enough people will be prepared to pay to make the service viable. And as I write this I think especially about, for example, how much an anytime return from Chippenham to Paddngon costs (£183) and how much an anytime return costs if you split it at Didcot (£56.60 + £68.50 = £125.10) I don't know how many leisure journeys are likely to be made at a fare of £125.10 each, let alone £183, and especially if there is more than one in the party.

So in the fullness of time, when all this is over, things may (or may not) change. But if they do change, those fundamental economic facts regarding supply and demand will still remain,, and they will need to be addressed.
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grahame
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« Reply #2 on: May 07, 2020, 12:52:52 pm »

That was me who posed that question.

Fare fear came up again yesterday:

3pm - Kirsty Hoyle from Transport for All
what are the needs of disabled users as we move into the next phase?
Fear of fare hikes which will hit more transport dependent and poorer groups (higher proportion disabled)

We live in interesting times ...

So in the fullness of time, when all this is over, things may (or may not) change. But if they do change, those fundamental economic facts regarding supply and demand will still remain,, and they will need to be addressed.

Very much so.
* What does it cost to provide?
* How many people are using it and what are they paying / prepared to pay?
* How much of a shortfall is there (subsidy needed) / how much of a government profit to be made?

Suggestion 1 - "remove anytime fare" - Chippenham to London return becomes £76.70
Suggestion 2 - "remove off peak fares" - Chippenham to London return becomes £183.00
(also noting that a single fare tier would remove the £55.90 super off peak)

For those people still doing a 5 day week in London, weekly season is £290.20 i.e. £58.04 per day.

The Rail Delivery Group guy at yesterday's Webinar did not mention / get involved with fares.

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grahame
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« Reply #3 on: May 11, 2020, 07:01:33 am »

Institute of Fiscal Studies - quoted in The Guardian 6 days ago

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Use of public transport could be discouraged as lockdown ends – IFS

The price of a bus, train or tube ticket during peak commuting hours could be raised relative to the cost of off-peak travel to prevent crowding and the spread of coronavirus on public transport, according to a leading thinktank.

Setting out a menu of options to end the government lockdown as ministers consider ways to reopen the British economy, the Institute for Fiscal Studies said discouraging public transport use during peak times could limit overcrowding and reduce the risks to public health.

[snip]

Among its recommendations the IFS said the usual logic of promoting public transport use – to cut congestion and pollution – could be reversed in order to limit the spread of the virus on packed commuter trains and buses, especially in London.

“The government could alter the relative prices of different types of commutes to better reflect this new reality. Examples would be to increase the relative price of commuting at peak times on the London tube and bus network, or to suspend the London congestion charge for drivers,” it said in the report.

Raising the relative price of public transport at peak hours could be done one of two ways. Ticket prices at busy times could be raised, or off-peak fares could be cut. Both options would raise the relative price of peak travel. The IFS did not say which option it recommended.

However, raising the price of public transport would deliver a financial blow to people who cannot change their working hours or are unable to commute by car. The IFS said that while off-peak prices could be cut, it would incentivise public transport at a time when commuting should be limited.
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Robin Summerhill
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« Reply #4 on: May 11, 2020, 09:26:55 am »

What an absolutely fantastic idea - I wonder why nobody else has thought of it...

People have spent the last couple of months on limited income, if indeeed on any income at all. And then a group of economistss/ accountants and sundry hangers-on come up with the brillliant wheeze of charging them more to get to their jobs when they are finally allowed to go back to them.

There is the real world, and there is a place where people who live in Cloud Cuckoo Land go to get away from it all. It's probably best if I leave my response there...  Roll Eyes
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