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Author Topic: Passenger numbers have returned better than income levels  (Read 571 times)
grahame
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« on: October 22, 2022, 09:12:26 am »

From Mark Hopwood 'at' TravelWatch SouthWest yesterday.

The recovery in passenger journeys is up to around 90% of the pre-covid level.  However, Farebox income is only around 75%.

That's something of an improvement income-wise on the summer, where income was just 70% of pre-covid, even though passenger numbers exceeded the pre-covid situation.



What's changed?   A lot more off peak and leisure journeys are being made, and lucrative business passengers are much thinner on the ground as so many have discovered that many meetings can be replaced by online meetings and conferences.  To some extent, the levelling out of traffic away from the busiest trains of the day (the 08:30 arrival into big-work-centre, and the 17:30 return to where-I-live) is to be welcomed as long term it helps avoid the need for extra capacity just at those peak times, but scaling up the figures for the most recent period, passenger numbers would need to be 120% what they were pre-covid to being in the same income.

I'm unclear as to how Mark's graph considers the fare rises that have happened since March 2020, or how it takes account of the shift across to the Elizabeth Line with TfL» (Transport for London - about) between Reading and London or GWR (Great Western Railway)'s withdrawal of all their services to Brighton - never the less, the discussion point remains.
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plymothian
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« Reply #1 on: October 22, 2022, 10:25:19 am »

"The Railway" has relied too much on income up front in terms of season tickets as it chronically leaks the potential turn up and go income.

It is not possible to charge everyone who travels by train for the journey they are making and this has been seen as a fair price to pay so a blind eye has been turned to it for too long.
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Hafren
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« Reply #2 on: October 22, 2022, 11:44:14 am »

I was thinking about this recently. It's the commuters and business travellers that bring in a lot of 'premium' income such as first class and peak fares, so even if we brought back the same numbers in leisure travel, the income wouldn't be the same – as seen in the recent thread on SE removing first class. (I would assume the discount achieved with season tickets doesn't completely offset the premium aspect.)

I'm finding peaks are becoming quite busy again, but probably with capacity not as it was on many routes – e.g. the valley lines now have 1x150 on many journeys that previously had 2x14x (which would be about 50% longer), and I recently used a peak WAT-RDG(resolve) service, and it was very busy, but I think only half-hourly even in the peak.

I suspect peak fares will have to stay, but could be simplified. I don't see them as being just about demand management; they're also about maximising revenue from the non-leisure markets. But given that demand is more spread, perhaps we could just retain morning peak fares, so the commuter market is targeted while leisure travellers don't have to worry about missing the evening peak (and filling up peak shoulder trains).

Could the first class concept be updated for the leisure market? I quite understand the former Network SouthEast TOCs (Train Operating Company) gradually losing first class; I struggle to see the product as offering very much, without any catering differential, and without even the lower-density 2+1 seating on some trains these days. Its only USP was a bit of space on an otherwise packed train. On InterCity journeys there's more of a differential offering with first class, so it serves more of a purpose, but with less business travel I wonder if it's as useful as it was. Weekend First is an example of adjusting the first class concept to fit leisure-dominated days.

Perhaps there are other ways that additional benefits can be given to leisure travellers to create new income streams. I'm not keen on simply having higher prices and targeting leisure traffic with bargain advance fares; that prices out people who can't plan around advance fares. I'm also not happy with the idea of paying a low fare and having to pay extra for anything decent (e.g. luggage space). But perhaps income can be generated by taking ideas like Weekend First and the Family Carriage concept (perhaps with bolt-on type offerings) and creating genuine extras, while not disadvantaging those who just want the baseline product to get them from A to B.

However, they need to work on getting the basics right first – reliability, capacity etc!
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eightonedee
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« Reply #3 on: October 23, 2022, 09:37:52 pm »

Quote
"The Railway" has relied too much on income up front in terms of season tickets as it chronically leaks the potential turn up and go income.

I am afraid I cannot agree. Any industry that has the opportunity to get the huge cashflow advantage of getting paid in advance and fails to take advantage of it is giving away an important business opportunity. It does not limit the potential turn up and go income - season ticket holders do not get reserved seats, and even without season tickets trains will be more crowded at the time people travel to and from work.

I appreciate that running a system that has to have the capacity to meet peak time demands imposes demands on the infrastructure, but if that demand is not there it calls into question the value of investing in such infrastructure and as I expect we all appreciate, railway infrastructure costs are high and the day-to-day running costs are high too, so need whenever possible to be borne by the largest possible passenger customer base. A railway kept going for occasional leisure use is much more likely to lose government support (and popular support if the public are consulted) than one which is widely seen as an important part of our daily work and business infrastructure.

This is not to say that there are no good reasons to keep lines that are much more dependent on leisure travel open - lines like the West Highland, Settle to Carlisle, Cumbrian Coast and so on have a justifiable role in supporting the tourist infrastructure of the regions they serve. But a lot of the passenger network is primarily a travel to work (and education) system that also provides capacity for non-businees and employment use. It helps keep commuters out of private road transport, but if it's cost increases and the convenience of season ticketing goes, many will go (or go back to) their cars, and all passengers will be the losers.
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TaplowGreen
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« Reply #4 on: October 24, 2022, 05:31:02 am »

Did Hopwood given any indication as to how these huge drops in income are to be addressed?

I note that SouthWest trains introducing new timetables in some areas to reflect the fact that peak travel is only at 53% of pre pandemic levels.
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grahame
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« Reply #5 on: October 24, 2022, 07:05:28 am »

Quote
"The Railway" has relied too much on income up front in terms of season tickets as it chronically leaks the potential turn up and go income.

I am afraid I cannot agree. Any industry that has the opportunity to get the huge cashflow advantage of getting paid in advance and fails to take advantage of it is giving away an important business opportunity. It does not limit the potential turn up and go income - season ticket holders do not get reserved seats, and even without season tickets trains will be more crowded at the time people travel to and from work.

I'm not sure this is an "either / or". 

The system does leak in collecting turn-up-and-go income in places, and I know darned well where some of those places are and which exact services.   Let's say that 85% of fares are correctly collected in area, how much more effort and investment should be put into collecting the final 15%, which are typically the short distance low priced ones?

There are already signs in the system of a pragmatic approach to gathering as much money as possible at a 'sensible' cost - return fares just 10p more than singles, for example, mean that the revenue collection folks essentially have 2 bites at the same cherry, and occasional blockades by revenue protection help scare the avoiders into paying.  But that latter is at the cost of it being a system under which the newcomer who does to know how it works gets scared off by all the PAY BEFORE YOU TRAVEL OR ELSE signage, and those are the very newcomers who are needed - not just for their first journey but for all their following journeys after the first great one.

There IS a need, IMHO (in my humble opinion), to simplify the fare system, which is a bit of a marketing disaster with hugely high anytime headlines. But this needs to be very brave if you reduce fares for the few%% who pay that much (through knowing no better in many cases), and you need to be braver still and see if some of the bargain specials really need to be as low as they are.

Did Hopwood given any indication as to how these huge drops in income are to be addressed?

I note that SouthWest trains introducing new timetables in some areas to reflect the fact that peak travel is only at 53% of pre pandemic levels.

Not specifically - so much is down to the DfT» (Department for Transport - about) to decide how to fill any gaps.   He did go through a lot of marketing stuff to encourage more people to be using the trains, and much of the intent at GWR (Great Western Railway) is to provide a service that optional users WANT to use.  Increase income by increasing passenger numbers, but limited by being a contract operator and not a franchise operator now.   Sadly, back to the old "cap and collar" issues where there may be little point from a First group shareholder point in doing very much, because most of what you do is increase the DfT "take" and the company get just crumbs
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Bob_Blakey
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« Reply #6 on: October 24, 2022, 07:44:55 am »

...Let's say that 85% of fares are correctly collected in area, how much more effort and investment should be put into collecting the final 15%, which are typically the short distance low priced ones?...

The answer, in my opinion, is as much as is required to ensure that 100% of fare income is collected. I do not accept that the railways should be treated differently from any other 'paid for' service, particularly since it is partially funded by the taxpayer.

(And I fully concur with your view that the ticketing system urgently requires simplification; I have previously posted elsewhere that I would like to see purely distance related fares with options only where multiple fast / semi-fast / slow services are available for the same journey. And the binning of Advance fares. Such a system would remove the need for both split ticketing and 'break of journey' confusions.)
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grahame
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« Reply #7 on: October 24, 2022, 08:10:44 am »

...Let's say that 85% of fares are correctly collected in area, how much more effort and investment should be put into collecting the final 15%, which are typically the short distance low priced ones?...

The answer, in my opinion, is as much as is required to ensure that 100% of fare income is collected. I do not accept that the railways should be treated differently from any other 'paid for' service, particularly since it is partially funded by the taxpayer.

I will go with a high-90s percentage.   But let me give you an example - a train journey I made from Freshford to Avoncliff.  Alerted train manager as I joined that I was getting of at Avoncliff and needed a ticket.  He didn't have time between stops ... (not a silly journey - it's quite a walk around via any other route).  How much extra would / should you invest in collecting such fares?

I would also compare to shops where, with the best will in the world, there is almost always an element of shrinkage.  And when we ran a hotel and IT courses, there was a tiny (and it was tiny) element unpaid.
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ChrisB
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« Reply #8 on: October 24, 2022, 03:27:20 pm »

Did Hopwood given any indication as to how these huge drops in income are to be addressed?

I note that SouthWest trains introducing new timetables in some areas to reflect the fact that peak travel is only at 53% of pre pandemic levels.

Not specifically - so much is down to the DfT» (Department for Transport - about) to decide how to fill any gaps. 

Peter Wilkinson, MD of Passenger Services, DfT did though - see the thread Graham produced with my precis of what he said elsewhere.

BUT he majored on suggesting that we won't see the railway of old (pre-pandemic) again - I think he was referring to services) and also mentioned any cuts to infrastructure wouldn't be unreversible, so I guess the worst-case scenario of mothballing lines rather than lifting them - that's my worst-case, not Peter W's

AND that the Government can't continue putting in £2billion or more annually into our railways.

I would suggest paying good attention to the financial statement being put out by the Chancellor next Monday - details of cuts to funding are likely to be included.
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