Virgin Trains East Coast franchise to end 24 June 2018 and is temporarily re-nationalised

[tbwbear]

East Coast has always been significantly cheaper than West Coast for as long as I remember. I remember being shocked in 1999 when I saw the cost of a ticket from Euston to Manchester and thought how much dearer it was compared to GNER which I was used to.

Yes, and I think there were even differences between the two routes even back in BR days.

 

[AlexNL]

The concession model doesnt work with southern however

That's because Southern/GTR are pretending to still be separate companies and brands, acting like a fully franchised operator. In reality they're just doing what DfT wants, as that's what they get paid for.

or between first group and heathrow connect.

Would you care to elaborate on that one?

 

[Tetchytyke]

And you demonstrate that how?

I think @TUC is showing that all customers would have to pay £103 if there were no competition, and that this would be bad for passengers.

 

[Starmill]

Look at the difference in fares I've just quoted.

But this demonstrates absolutely nothing? All you have achieved is pointing out that the SOS from Doncaster to London is very expensive - more expensive than most individuals would ever pay for that journey. Competition hasn't impacted that.

I think @TUC is showing that all customers would have to pay £103 if there were no competition, and that this would be bad for passengers.

Except that he's not, because they wouln't :roll:

 

[London Trains]

I don't know how much you spend annually on your phone contract, but if it's several thousand pounds I'm going to go ahead and suggest you may be being ripped off.

Erm, that's not how O2 Priority works. I have an O2 PAYG Sim I barely use and still get these rewards.

But, back on topic now.

 

[matt_world2004]

Would you care to elaborate on that one?

This is speculative but it is based on posts on here. Heathrow Airport holdings run the heathrow connect as a concession on behalf of first group between Hayes & Harlington and Paddington. However apparently according to posts on here there is insufficent penalty to deter Heathrow Airport Holdings cancelling the connect, which makes the service fodder for Heathrow express cancellations.this I must stress is speculative however but there are several posts from people on here which appear to back this up.

 

[TUC]

Savers are what are now called off-peak returns, that's why their code is SVR. Supersavers were like super-off peak but worse as they weren't valid on a Friday.

I'm talking about before then.

 

[TUC]

But this demonstrates absolutely nothing? All you have achieved is pointing out that the SOS from Doncaster to London is very expensive - more expensive than most individuals would ever pay for that journey. Competition hasn't impacted that.


Except that he's not, because they wouln't :roll:

Except that I am.

 

[tbwbear]

I think @TUC is showing that all customers would have to pay £103 if there were no competition, and that this would be bad for passengers.

I get that, but couldn't it also demonstrate that the existence of competitor's fares as low as £30 has done little to reduce the fares of the main operator ?

Surely if competition were working the fares would be a bit closer wouldn't they ? Given that the product is so similar ?

 

[TUC]

East Coast has always been significantly cheaper than West Coast for as long as I remember. I remember being shocked in 1999 when I saw the cost of a ticket from Euston to Manchester and thought how much dearer it was compared to GNER which I was used to.

Even then the moderation of competition rules on the West Coast were having a determental effect.

 

[Starmill]

Erm, that's not how O2 Priority works. I have an O2 PAYG Sim I barely use and still get these rewards.

That was kind of my point? It's not a rewards programme for high value customers, it's open to almost anyone, even people who spend very little money on O2's services.

 

[TUC]

I get that, but couldn't it also demonstrate that the existence of competitor's fares as low as £30 has done little to reduce the fares of the main operator ?

Surely if competition were working the fares would be a bit closer wouldn't they ? Given that the product is so similar ?

Look a bit further ahead and they are. For Tues 13, Doncaster-London, 0925 (HT) is £35, 0930 (GC) is £30.40, 0948 (VTEC) is £44.50.

 

[Starmill]

Except that I am.

You responded to FQTV, you stated incorrectly that he was only comparing First Class fares. His comparison was over the effect that Hull Trains and Grand Central have on the pricing VTEC use.

You demonstrated his point - and my point - perfectly. That the effect of Hull Trains and Grand Central on the pricing used by VTEC is limited. In your example, the effect was zero. The price would be exactly the same regardless of weather Hull Trains and Grand Central were running or not.

 

[TUC]

You responded to FQTV, you stated incorrectly that he was only comparing First Class fares. His comparison was over the effect that Hull Trains and Grand Central have on the pricing VTEC use.

You demonstrated his point - and my point - perfectly. That the effect of Hull Trains and Grand Central on the pricing used by VTEC is limited. In your example, the effect was zero. The price would be exactly the same regardless of weather Hull Trains and Grand Central were running or not.

The effect on flexible fares is limited. The effect on advance fares is substantial.

 

[Non Multi]

I get that, but couldn't it also demonstrate that the existence of competitor's fares as low as £30 has done little to reduce the fares of the main operator ?

Surely if competition were working the fares would be a bit closer wouldn't they ? Given that the product is so similar ?

Competition is working, given the choice in the recent past between a VTEC advance fare and Hull Trains one, I chose HT on price. If VTEC offered the cheaper fare I'd probably have purchased it instead.

 

[Starmill]

The effect on flexible fares is limited. The effect on advance fares is substantial.

Oh, interesting change in the story there then.

Even then the moderation of competition rules on the West Coast were having a determental effect.

What?? Who would there have been to do any competing with them in 1999?

 

[Starmill]

East Coast has always been significantly cheaper than West Coast for as long as I remember. I remember being shocked in 1999 when I saw the cost of a ticket from Euston to Manchester and thought how much dearer it was compared to GNER which I was used to.

Hmmm

Oxenholme to London Off-Peak Return £103
Darlington to London Off-Peak Return £215.50

 

[TUC]

Oh, interesting change in the story there then.
?

No change at sll.

 

[TUC]

What?? Who would there have been to do any competing with them in 1999?

The knowledge that no competitors could come along already gave VTWC no incentive to reduce prices.

 

[tbwbear]

Look a bit further ahead and they are. For Tues 13, Doncaster-London, 0925 (HT) is £35, 0930 (GC) is £30.40, 0948 (VTEC) is £44.50.

Okay but the 0918 (VTEC) is £55, and that is not too different from one from Sheffield to London (EMT) for £62 departing at a similar time. (They have £25 departing later in the day)

I know that it is really difficult to compare route to route, but Sheffield and Doncaster are similar distances from London. Sheffield had no direct on rail competition.

Are the fares so dramatically different?

Aren't there many other factors at play here, and on-rail competition is just one of them ?

 

[Starmill]

No change at sll.

You presented the price of the SOS against the price of a (very expensive) set of Advance tickets and said it was evidence that competition has had a downward effect on VTEC pricing.

It's clear to me now that not only do you have no evidence to support your point, you do not even really know what your point is.

 

[TUC]

Okay but the 0918 (VTEC) is £55, and that is not too different from one from Sheffield to London (EMT) for £62 departing at a similar time. (They have £25 departing later in the day)

I know that it is really difficult to compare route to route, but Sheffield and Doncaster are similar distances from London. Sheffield had no direct on rail competition.

Are the fares so dramatically different?

Aren't there many other factors at play here, and on-rail competition is just one of them ?

There are large areas betwern Doncaster and Sheffield where both stations are pretty much equal choices for travelling by rsil, so the fares of one impact on the other.

 

[Starmill]

Aren't there many other factors at play here, and on-rail competition is just one of them ?

Absolutely. On-rail competition generally produces anti-customer outcomes as the railway is a natural monopoly. There are myriad examples, like Manchester to Crewe. On-rail competition opens up anomalies and creates vast confusion and more fundamentally some open access operations are primarily engaged in cream-skimming behavior, which reduced the money available to fund infrastructure enhancements. The Railway has been especially good at exploiting this by ensuring that the rules are as restrictive as possible, and that they have the right to charge full price with no discounts to anyone who gets on the wrong train or buys the wrong ticket, or even to Penalty Fare them where relevant. Just because there are a few cases where it leads to cheaper fares and expands the market (London Midland were the main example of that), that does not demonstrate an overall net positive effect. The answer is regulation. Competition is within the market is a folly.

 

[LNW-GW Joint]

Looking at Doncaster-London services after 0900 tomorrow (Not weeks away), the fares are 0918 (VTEC) £103.50, 0925 (Hull Trains) £58.00, 0930 (Grand Central) £30.00. Guess what the fare would be if there were no competition?

I presume all this discussion is about Advance fares.
They account for about 30% of tickets sold, and more people will be buying off-peak fares (plus a selection of Anytime and Seasons and other fares).
There is less differential on these fares, and there is some regulation of them.
Basically my point is that I think the debate is exaggerating the significance of extra-low fares, and therefore of revenue abstraction.
VTEC nearly always wins on frequency, and has no serious competition on the big markets (Leeds, Newcastle, Edinburgh).

 

[Kettledrum]

Absolutely. On-rail competition generally produces anti-customer outcomes as the railway is a natural monopoly...... The answer is regulation. Competition is within the market is a folly.

Regulation and competition have both failed on the East Coast, and numerous other franchises.

I think the answer is natonalisation.

 

[dcsprior]

EC Rewards:
Not too sure why people labour on this.
It was a free rewards system. I got annoyed when O2 changed the way their Priority Moments app works, so you can't use the code more than once. But I didn't set up a Twitter feed or continue to moan about not being able to get something for free.
No company has to reward anyone. Most places I shop don't do rewards of any kind. Asda certainly don't!

For me it's because the abolition of rewards was effectively a hidden price-rise. I wouldn't have minded if this was combined with a decrease in headline price on the route/times I was buying - but with VTEC the hidden price rise was accompanied by an overt one, as I explained in post 389.

Indeed these days I fly to Gatwick and have the choice of easyJet (lower headline price, but if I want fasttrack/seat selection/etc I have to pay an additional per-flight or annual charge; similarly if I want lounge access I have to pay someone else for it) or BA (higher headline price, offset by Avios which get free/reduced flights and after the first year get free fastrack/seat selection/lounge access). I choose the option with the lower headline price, so if VTEC had scrapped rewards but made an equivalent reduction in fares I'd have been perfectly happy!

 

[tbwbear]

There are large areas betwern Doncaster and Sheffield where both stations are pretty much equal choices for travelling by rsil, so the fares of one impact on the other.

Okay fair enough.

But I am still not convinced that the system of current limited on-rail competition is the best way to produce lower fares from the main operator, particularly for the non-advance fares. Surely a system of better and tighter regulation would be better ?

Would we say, for example, that the existence of Chiltern from Birmingham Moor St has had the effect of reducing the Virgin fares (not just the advanced ones) from Birmingham New St. anymore than say from Nottingham where no competitor exists ?

 

[Bletchleyite]

Weren't Savers the original Advance fares in that, if I remember rightly, they were originally lower fare tickets tied to a fixed train?

No, that was Advance Saver and SuperAdvance, which were versions of the Saver and SuperSaver but requiring booking in advance (I forget how long), availability on both trains (but the quotas were large unlike Apex/SuperApex which could be very hard to get) and only a couple of quid cheaper. Also the SuperAdvance didn't have the Friday/summer Saturday restriction, though quotas were no doubt limited.

How about the fact that GC and Hull Trains have given through London services to towns that BR was disinterested in such as Hartlepool, Halifax, Selby and Hull? How about the fact that Doncaster-London fares are much lower than comparable West Coast journeys? Doesn't the fact there are three competing operators for that route have more than a little to do with it?

Those journeys are rather de-minimis, though. You would only get true competition if there was another TOC operating London to Newcastle hourly, say; what you have now is all a bit like an airline putting on a flight from East Midlands to Rotterdam once a fortnight and claiming they are making serious inroads against easyJet on Luton to Amsterdam. I suppose the one journey you could argue was *significantly* competed with for long distance was London to Edinburgh, where a slower but cheaper option exists in the VTWC trains via Brum - but that's Stagecoach/Virgin competing with themselves anyway!

Stagecoach in 1991 wasn't it?

That's a bit of an outlier - and weren't they Standard only?

 

[dcsprior]

One does get the feeling that some people here as just against franchising per second because they believe that public transport should be state operated. I have to question that assumption. Food is even more essential than transport and no one is suggesting the state operates supermarkets.

Some things are natural monopolies - this includes things like rail infrastructure (Network Rail), electricity & gas distribution (National Grid / Transco), roads, last mile telephony provision (OpenReach). By natural monopoly I mean that any savings from increased efficiency driven by competition would be vastly outweighed by increased costs of duplicating effort or infrastructure, therefore it makes sense for them to be monopolies.

I'm not comfortable with monopolies being private companies. I'm happy with them being run by the state, or tendered by the state for a private company to provide at a fixed price, or perhaps for some other ownership solution (e.g. OpenReach could be run as not-for-profit run by a consortium of all the telcos)

Supermarkets are not a natural monopoly, which is why I would never suggest the state operates them. Train Operating Companies may or may not be - I'd like to see either

• Two winners of each franchise, each operating approximately half of the journeys - so that customers benefit directly from competition.
• Franchises tendered to be run on behalf of the state on a fixed price basis (which I think is what happens on London Underground/Overground and Scotrail?)
  
• Services ran by a body which was state-owned, but independent of day-to-day political meddling.

 

[DieselDaz]

Personally after working on the railway at Newcastle upon Tyne and at Norwich. This story really smacks of the reasons why the network should be nationalised as a whole, be managed at arms length from every government department by people who know how to make a profit from operations, manage expenditure, have a full team of accountable management and align the whole fleet of trains to specific types.

Also personally for the london/South to the North and Scotland routes more emphasis and investment should be made in aviation utilising the released paths for local/regional and freight trains. Getting more people to fly the longer distance routes makes more sense and provides more jobs as a whole.

Also I am 100% in favour of keeping guards on the trains.