There's been much talk of the the 10.4% growth promised by First versus the 8.4% growth promised by Virgin.
What I'm not clear on is what growth this refers to. Is it growth in revenues, revenues less costs, passenger numbers, total passenger miles or something else?
What I do know is that these growth figures correspond to year 2025 figures being 3.62 times what they are now for First and 2.85 times what they are now for Virgin. [For comparison, the Office for National Statistics are forecasting a 7.86% UK population growth over 10 years. From this, we can extrapolate and say that in 2025 there will be 1.103 times as many people in the UK as now.]
If we're talking revenue, I would assume, for those growth figures to be meaningful, they are ignoring inflation, so that revenue would in fact be far bigger in 2025 than even those figures imply; unless, of course, the global economy performs so bad we have several years of deflation. (Who knows? That might just happen!)
If we're talking passenger numbers, I suspect that even the Virgin figures are wildly optimistic. All the infrastructure improvements over period of the last franchise revealed that there was a lot of suppressed demand that is now being largely met. The average VT occupancy -- I saw 47% quoted -- reflects my own experience that there are the occasional trains that are rammed, usually because of big events taking place, and quite a few running near full bringing the average up. Meanwhile there are a lot of VT trains running up and down the WCML less than a third full. Even the very cheap Advance fares that are often still available the day before travel are not filling up these trains.
Tim O'Toole argues that VT's marketing is poor. He must be living on another planet to me, because I felt that one of the areas in which Virgin excel is in marketing, often to the extent of appearing to promise far more than they actually deliver. Whatever I feel myself about Virgin, they do seem to be well liked by the British public, so their PR is effective. And there's no shortage of emails from them in my inbox exhorting me to check out their cheap Advance fares. Sure, they could go for more billboard, press, cinema, radio and tv advertising, but (a) that all comes at a huge cost, and (b) it's hard to target and therefore not necessarily cost-effective.
With petrol prices consistently outpacing inflation and forecast to carry on doing so, maybe there's potential to shift many more car journeys to rail? Were rail fares forecast to become better value over time, that would be a feasible scenario. Instead, the promise is of average fares being increased at 3% over RPI. In a world where most people are feeling the economy biting, the more likely scenario, I would argue, is that people will reorganise their lives so that journeys become unnecessary -- take jobs closer to home, teleconferencing, etc. -- or are simply sacrificed. When money is tight, people will look more to local attractions for days out rather than what the capital has to offer.
I suspect the 1995-2005 period may prove to be the last great boom period of Western economies such as ours. With China dominating global manufacturing and service industries being increasingly outsourced to low-wage economies, it's difficult to see where our next upturn can come from. Factor in the burden of the diverging Euro-based economies, and I struggle to see where the UK will generate the wealth that will enable us all to be travelling so much more on the WCML in 2025.