The idea for this thread came from the Railways vs flying from London - Scotland thread (
https://www.railforums.co.uk/thread...st-to-scotland-axis-of-services.223987/page-7)
I think it's clear that the current fare system just simply doesn't work.
The traditional peak/ off-peak fares put off many ordinary consumers with their high fares and complexity. Advance fares are a blunt instrument that fail to stimulate demand in the right areas at the right times. Peak time trains often leave with a fair amount of space whilst the first off-peak train is usually jam-packed. People on the cheapest advance fares get the pick of their seat whilst someone on the most expensive walk-up fare may need to stand all the way from London to Edinburgh.
Most critically, trains are just incredibly poor value compared to air fares. easyjet and BA both run multiple flights from five different London airports to both Edinburgh and Glasgow and are very often cheaper than the train (The argument of the 'convenience' of the train on these long jounreys is best kept for the thread above. Lots of arguments have been put forward, though it's clear that airports have the advantage in this area). This is simply beyond belief when you remember that airlines are heavily taxed and trains are heavily subsidized.
I am not talking short/ commuter journeys of-course, but routes where the train competes with airlines and motorway speed intercity coaches for sub 4 hours routes.
My idea is that the train companies should just emulate the airlines. Airlines are masters of revenue extraction. They know how much to charge to get the maximum revenue and the introduction of low-cost airlines and the changes mainline ones have made have revolutionized the industry. They know the importance of non-fare revenue. They know the importance of marketing and how 1p fares, which basically nobody gets, gets a ton of marketing and people talking. The railway on the other hand seems stuck in the 1960s.
Why not have fares from London to Edinburgh from 1p? Of course, not everyone would pay a penny, that vast majority would pay a lot more; but the idea of the penny fares excites the consumer and makes them think they are getting a good deal on the 'low-cost' railways.
Trains should be priced to fill them, just like Ryanair, easyjet, British Airways and basically every airline does.
Do forget about the additional revenue sources! Cheap seats don't come with a seat reservation, that costs extra. Want a window seat or a table seat? That costs more money for everyone. The quiet carriage? That also costs more. Wifi? That costs more. Food/ drinks from the trolley can be pre-sold etc.
I'm not totally radical though. The current peak fare should stay as a cap and season tickets should still be available.
This has no need to be cost neutral. Stimulating extra demand, taking people off other modes of transit and cars and improved revenue management should increase revenue (just as it has for airlines) and, thus, increase profitability/ reduce the need to subsidy.
No doubt someone will post below about the fallacy of one £200 fare is better than two £80 ones.
That's just a basic misunderstanding how airline pricing and true revenue management works. It's far better to have one £180 fare, two £90 fares + £10 seat reservations, one £30 fare + £6.50 meal deal than just that one £200 fare. It's even better to have ten £20 fares than one £200. Why? Better chances of more revenue extraction and upselling.