Will HS2 require premium fares?

[Irascible]

As I said above, I do see them bringing in the depressing OuiGo model. That would leave them able to brag about cheap headline fares whilst simultaneously making the experience so horrific that anyone with any money will avoid the cheap trains like the plague.

Making trains so bad that noone will use them does not make any economic sense whatsoever. Just don't have the train at all, it's equally grim & equally effective, without the overhead.

We know what the frequency will be, don't we? assuming it doesn't get chopped at some point. Do we have a BCR for a single journey?

 

[Bletchleyite]

As they should do, given that Spanish lines go through empty countryside and HS2, well, doesn't.

I don't see HS2 bringing lower fares because a) someone has to pay for it and b) railway pricing doesn't work on simple supply-and-demand.

As I said above, I do see them bringing in the depressing OuiGo model. That would leave them able to brag about cheap headline fares whilst simultaneously making the experience so horrific that anyone with any money will avoid the cheap trains like the plague.

You mean having designated, branded cheap trains? I doubt it.

I do however expect that type of fares model, i.e. there will be no walk up fares at all. Basically the same as Eurostar.

 

[Tetchytyke]

Making trains so bad that noone will use them does not make any economic sense whatsoever.

The Ryanair model is very successful. Price-conscious travellers use them, price-unconscious travellers avoid them like the plague.

OuiGo fares are cheap, but they have 3-abreast seating and you have to pay extra for luggage or even to have a plug socket at your seat.

You mean having designated, branded cheap trains? I doubt it.

I do. Cheap tickets affect your ability to charge top dollar on the same train. The easiest way of removing that problem is to corral the cheapest tickets on to a specific train service.

Given the capacity of HS2, there's plenty of space to run a specific budget service that doesn't dilute the prices for the main product.

 

[Bletchleyite]

OuiGo fares are cheap, but they have 3-abreast seating and you have to pay extra for luggage or even to have a plug socket at your seat.

I am no particular fan of Ouigo's shoehorning of low cost airline practices into rail, I think the London Midland (continued by WMT)/Chiltern model of offering low walk-up fares on a slower train that's running anyway is a better one in many ways, though that may just be down to what appeals to me personally. The luggage fee is particularly silly, I don't overly care about sockets because I own a power bank and my laptop has 8 hours' battery life (as did my previous cheapo 300 quid HP, so it's not hard to get one that does - and that one had a swappable battery pack so could be kept that way at very low cost).

However I do feel I need to defend them here with regard to the seating.

The seats fitted to their trains are the Compin (?) type that are used in most older Electrostars, and in First Class on 350s and 450s, i.e. these:

Interior of Southeastern Electrostar, from showmethejourney.com

They aren't my favourite, but they certainly aren't bad and I'd happily sit in one for a many-hour journey. They are hardly ironing boards, and a complaint about them is very rarely heard on here - the only one you do seem to get is the armrests being a bit high for some (but you can always put them up).

The 3-abreast thing also requires a bit of analysis. The layout with 3-abreast only exists in part of the train, and is because of the First Class areas being converted to Standard, and the presence of a sunken aisle in First Class on the double deck TGVs so they can't do 2+2. The 3-abreast seating is in a 3+1 layout, not 3+2. This actually has some strengths, not least the bays of 6 being good for families/groups and the individual seats being great for, well, individuals, plus it feeling less cramped with 3 people across than 2+2 does, and I've proposed some TOCs should consider doing this anyway even when not forced because people may sometimes like it!

So will HS2 have this layout? Almost certainly not, particularly given that the published HS2 train spec specifies 2+2 in Standard.

So I think the only thing we're really needing to look at with Ouigo is the fares structure, which if you take away the silly charge for luggage is just a yield-managed Advance-only-type structure, and one I think HS2 is near-certain to have anyway, i.e. basically as per Eurostar. With regard to seat selection I don't overly mind paying a little for it because to get optimal use of seats with compulsory reservations you need at least some people not to select, so e.g. if you've got a train doing A-B-C-D you can put A-B, B-C and C-D reservations in the same seat when people aren't bothered about where they sit. If everyone selects, you get a sub-optimal allocation and so end up being able to sell fewer tickets because the train is "full" even though practically it isn't.

 

[Trainbike46]

You mean having designated, branded cheap trains? I doubt it.

I do however expect that type of fares model, i.e. there will be no walk up fares at all. Basically the same as Eurostar.

Just curious, but why would they do that?

 

[JonathanH]

Given the capacity of HS2, there's plenty of space to run a specific budget service that doesn't dilute the prices for the main product.

Which destination would the specific budget service be run to? There certainly isn't capacity for a specific budget service to all the proposed destinations.

 

[swt_passenger]

Just curious, but why would they do that?

There’s no evidence for that at all. It’s just an opinion Bletchleyite has repeated in most HS2 fare discussions.

 

[Trainbike46]

There’s no evidence for that at all. It’s just an opinion Bletchleyite has repeated in most HS2 fare discussions.

Thank god there's no evidence for it, but I am wondering why @Bletchleyite thinks they would or should do that. It just seems like a way to inconvenience passengers and remove a relatively lucrative fare for no clear benefit

 

[Bletchleyite]

Just curious, but why would they do that?

I understand (from discussions on here) that the evacuation plans for the long tunnels are, like with Eurostar, predicated on loadings no greater than a fully seated load. If this is correct, compulsory reservations are a given.

You could have CR with the existing fares structure as LNER did during COVID, but I would be surprised if that happened.

 

[stuu]

I understand (from discussions on here) that the evacuation plans for the long tunnels are, like with Eurostar, predicated on loadings no greater than a fully seated load. If this is correct, compulsory reservations are a given.

You could have CR with the existing fares structure as LNER did during COVID, but I would be surprised if that happened.

Why would that mean no walk up fares though? Wouldn't it just mean they would tell you to catch the next one with available space?

 

[MattRat]

Making trains so bad that noone will use them does not make any economic sense whatsoever. Just don't have the train at all, it's equally grim & equally effective, without the overhead.

Why is everyone assuming the government thinks logically?

 

[Bletchleyite]

Why would that mean no walk up fares though? Wouldn't it just mean they would tell you to catch the next one with available space?

We know that neither the TOCs nor the DfT like Off Peak walk-ups. Thus I see this as an opportunity for them to get rid.

There could, like Eurostar Business Premier, be an Anytime equivalent (i.e. a ticket with unlimited changes of reservation at no charge) but it is likely to be very expensive and not purchased by many people.

You will clearly be able to walk up and buy a ticket, it'll just be an Advance. It may or may not be expensive to do so depending on how busy the train is.

Do I like this? Not really, but I'm being realistic.

 

[Tetchytyke]

Thank god there's no evidence for it, but I am wondering why @Bletchleyite thinks they would or should do that. It just seems like a way to inconvenience passengers and remove a relatively lucrative fare for no clear benefit

I don't see that they would remove walk-up fares, but I do expect reservations to be mandatory.

Which destination would the specific budget service be run to? There certainly isn't capacity for a specific budget service to all the proposed destinations.

I could forsee a budget service to the main destinations of Birmingham and Manchester, perhaps Scotland too.

So I think the only thing we're really needing to look at with Ouigo is the fares structure, which if you take away the silly charge for luggage is just a yield-managed Advance-only-type structure

OuiGo was (partly) brought in to prevent the budget tiers from undermining the pricing on the main TGV product. So you get dedicated trains and stupid luggage charges.

I know it's slightly different as the other main motivation was for SNCF to get their own competition established before the French railways potentially get liberalised.

I can see the same motivation applying to HS2. It's hard to routinely offer £10 seats without undermining the more expensive tiers.

 

[Bletchleyite]

OuiGo was (partly) brought in to prevent the budget tiers from undermining the pricing on the main TGV product. So you get dedicated trains and stupid luggage charges.

I know it's slightly different as the other main motivation was for SNCF to get their own competition established before the French railways potentially get liberalised.

I'm pretty sure the latter is the greater of the two motivations, though market segmentation is a valid thing to do (see also LNR long distance services - they are simply not in the same market as Avanti other than possibly on the fairly short Birmingham route - they are primarily competing with road coaches and you and your mates in your old banger on the M1).

Were it not for liberalisation I suspect they wouldn't have even considered it.

I can see the same motivation applying to HS2. It's hard to routinely offer £10 seats without undermining the more expensive tiers.

Long advance booking horizons for cheaper fares have typically been the way to do this in the past. It is true that offering ten quid APODs (or even the day before) is going to undermine the higher fares now business travellers mostly won't go 1st, but business trips tend not to be planned a month ahead.

But none of this is rocket science. All you are needing to look at for what it might look like is LNER during COVID, give or take the Super Off Peak Single which I suspect will go away. Almost everyone uses LNER Only Advances on LNER because their walk-ups are somewhat high compared with the West Coast route (for historical reasons).

 

[RailWonderer]

We know that neither the TOCs nor the DfT like Off Peak walk-ups. Thus I see this as an opportunity for them to get rid.

Why don't they like them?

 

[The Ham]

The cost of construction is part of the operating costs, the circa £50+ Billion pound construction incurs interest costs which must be paid and the infrastructure doesn't last forever, the rails are steadily wearing out as services run over them, the signalling and electrical infrastructure ages for every year it is in use, the civil engineering structures are steadily degrading. So the interest costs, plus the depreciation of the asset are part of these operating costs.

Indeed, which is why I then went on to assume that the running costs of each set was the same, even though I'd highlighted that most of the other factors would be cheaper.

However it should be noted that ticket prices are only part of the payment repayment.

For example when the government spends money they recover part of it through taxes paid, either directly or through the increase to the economy from the spending.

 

[Bletchleyite]

Why don't they like them?

Because they provide a price-cap at the busiest times of the week when they'd like to charge more.

 

[HSTEd]

Also worth noting that once HS2 is built, most of the infrastructure cost is sunk and thus has no impact on the choice of operating strategy.

The state has to pay to defray the construction cost no matter how many trains run on it - the only thing that matters are the marginal (crew, energy or maintenance) costs of running each train.

 

[Dr Day]

The desirability or otherwise of reservations/dedicated train tickets depends very much on the journey being made.

Somewhere with an hourly direct frequency is probably fair enough to be operated like TGV type services elsewhere, where a reservation is compulsory but can be made on the day, minutes before departure potentially. Hopefully this can be through an easy-to-use app, with a product range including reasonable value easy-to-change tickets. This means everyone has an allocated seat, so should be in the right place on the platform for what will be very long trains.

But say London-Birmingham will be pretty much a 'turn up and go' type frequency with possibly products to match, although I would image the operators would want to encourage passengers onto lighter-loaded services where possible, and yield manage to maximise revenue with some form of variable supplement.

The more messy area is where only one leg of a multi-leg trip is on HS2. How integrated will fares be with the rest of National Rail for connections and through journeys?

 

[Bletchleyite]

The more messy area is where only one leg of a multi-leg trip is on HS2. How integrated will fares be with the rest of National Rail for connections and through journeys?

My suspicion would be "not at all", and that things would likely move to a system more based on "official" splitting (i.e. at change points). That or you'll end up with IC being compulsory reservation, one ticket per vehicle journey as the French, Italians etc do (and increasingly the Germans too; Flexpreis does exist but it's quite expensive), and you'll simply tap in with your card or device for any connecting local segment.

London-Brum and London-Manchester will have such high capacity that if you don't know when you're coming back you'll be able to buy once you do know (and if you did get stuck there'd still be the classic WCML and Chiltern). London-Scotland is mostly an Advances market anyway. Meanwhile with opening not for another 10+ years, a lot of older mobile phone "refuseniks" will no longer be with us (or will be travelling less), so likely 90% + of tickets will be sold from some sort of personal device. Look at cinema and how just about nobody books at the desk now.

 

[Purple Orange]

My suspicion would be "not at all", and that things would likely move to a system more based on "official" splitting (i.e. at change points). That or you'll end up with IC being compulsory reservation, one ticket per vehicle journey as the French, Italians etc do (and increasingly the Germans too; Flexpreis does exist but it's quite expensive), and you'll simply tap in with your card or device for any connecting local segment.

London-Brum and London-Manchester will have such high capacity that if you don't know when you're coming back you'll be able to buy once you do know (and if you did get stuck there'd still be the classic WCML and Chiltern). London-Scotland is mostly an Advances market anyway. Meanwhile with opening not for another 10+ years, a lot of older mobile phone "refuseniks" will no longer be with us (or will be travelling less), so likely 90% + of tickets will be sold from some sort of personal device. Look at cinema and how just about nobody books at the desk now.

There is a problem here. I note earlier up the thread that you equated HS2 to Eurostar in terms of booking a specific seat on a specific train, however the London-Birmingham, London-Manchester and Manchester-Birmingham markets don’t work in the same way as London-Paris. I can see how it can work from a leisure market perspective, but the business market requires flexibility. I may plan to leave London on a 6pm train, but my work demands may change late in the day and I therefore can’t make the 6pm train. People travelling in and out of London from Birmingham or Manchester, will need just as much flexibility as those who will be travelling up the ECML to Leeds or the GWML to Bristol.

 

[Purple Orange]

Furthermore, if flexibility is to be built in to the price of a ticket, it therefore assumes that a percentage of seats on a train can’t be reserved.

For example, the cheapest ticket may tie you to using a specific train, but if 20% of tickets sold were at a flexible premium fare allowing you to book a seat on any train on a given day, there needs to be a set number of seats available for those last minute changes (Let’s say 10% of capacity, if 50% of flexi ticket passengers stick to their booked time). The consequence is that most trains won’t run at capacity, but the additional premium will need to cover the opportunity cost.

 

[zwk500]

There is a problem here. I note earlier up the thread that you equated HS2 to Eurostar in terms of booking a specific seat on a specific train, however the London-Birmingham, London-Manchester and Manchester-Birmingham markets don’t work in the same way as London-Paris. I can see how it can work from a leisure market perspective, but the business market requires flexibility. I may plan to leave London on a 6pm train, but my work demands may change late in the day and I therefore can’t make the 6pm train. People travelling in and out of London from Birmingham or Manchester, will need just as much flexibility as those who will be travelling up the ECML to Leeds or the GWML to Bristol.

This could be solved by either allowing fee-free rebooking until very late before departure, or by allowing people fee-free cancellations until, say, 30 minutes before departure. This would mean that a proportion of seats for each journey got released shortly before departure, allowing people changing plans to rebook into them at the last minute.

 

[London Trains]

Personally I would go the complete opposite way to everyone else.

Given the massive upgrades in capacity, HS2 doesnt need to be booked to have every seat full for the entire journey, and seat reservations on a train are stupid and completely useless.

Therefore I would not have any advance or peak fares available, or any seat reservations, just simple adult and child anytime flat fares.

Additionally with my idea I would have Euston/OOC, Bham Intl/Curzon St and Manchester Airport/Piccadilly as fare groups so they could be used interchangeably.

 

[py_megapixel]

seat reservations on a train are stupid and completely useless.

Maybe they are for you. By and large, though, they are not, and the general public seem to like them.

I would not have any advance or peak fares available, or any seat reservations, just simple adult and child anytime flat fares.

At busy times, there will be more demand than capacity. From a revenue perspective, does it not makes sense for that capacity to be prioritised towards the people who are prepared to pay more?

 

[tomuk]

the general public seem to like them.

My observation is a large proportion of the general public ignore them once on the train and choose their own seats.

 

[py_megapixel]

My observation is a large proportion of the general public ignore them once on the train and choose their own seats.

Fair point.. though people do like the assurance that they will have a seat.

 

[Purple Orange]

My observation is a large proportion of the general public ignore them once on the train and choose their own seats.

That’s because it is not treated like a flight. Although I’ve not seen this on Eurostar, but the whole process feels more like going through an airport than it does getting a train between London & Manchester. We are also talking about very short journeys now - they are shuttles and I think people will treat them as such.

 

[tomuk]

If HS2 does need to control the number of passengers per service for safety reasons could you not introduce 21st Century Blackpool North crowd control measures where the barriers (holy and venerated doors) only let a train load of passengers onto the departure platform on a first come first served basis? Do you need reservations for a 3tph 40min shuttle to Brum.

 

[Mikw]

By the time this thing is built, and the every increasing cost of living, and rail fares always going up - will anybody actually be able to afford to travel on it?