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Train fares will fluctuate based on demand in a similar way to airline tickets as the rail industry seeks to move into the 21st century, the transport secretary has announced.
Ministers believe this so-called “demand-based pricing” will help better manage capacity while also raising revenue, according to the Department for Transport.
Treasury officials are understood to be blocking the plan amid fears it could increase the approximate £11 billion annual cost to the taxpayer of subsidising the rail network. They want to cut rail network costs instead, but critics say this would cause a spiral of lower passenger numbers and revenues.
Read the article properly and it'll be clear why this must be resisted.
It wasn't about £1 fares on peak time services, which TOCs can already do if they want using Advances.
It was about being able to increase BEYOND the present (Super) Off Peak and Anytime fares when it's busy.
Nothing the RDG ever proposes is good for the passenger, but they certainly are masters of spin - this even fooled the Man in Seat 61!
It is GOOD that this has been blocked. Please give support to HMG for having done so and don't pander to the likes of FirstGroup who just want a fat profit!
Under the proposals backed by the DfT, rail operators would be able to follow budget airlines, car-hire companies and hotels in offering so-called demand-led pricing. This would mean offering tickets at a significant discount on routes and at times when demand was low, to fill more seats.
Prices at peak times or on busy routes could rise, but the hope would be that increasing rail usage overall — even at lower prices — would raise total revenues and reduce the subsidies required to keep the network going. A source said: “Even if you sold an empty seat for a pound, that is still a pound you would not have got it if no one is in it.”
Perhaps I have been duped, but, i do think we should be selling as many seats as possible.
Why not have an upper limit on prices, but implement the model anyway? IT would amount to the same revenue as the current system, at a minimum, but would be better at selling empty seats.
Or, have a reverse model in the hours leading up to departure, a falling ticket price until all seats are sold?
Perhaps I have been duped, but, i do think we should be selling as many seats as possible.
Why not have an upper limit on prices, but implement the model anyway? IT would amount to the same revenue as the current system, at a minimum, but would be better at selling empty seats.
Or, have a reverse model in the hours leading up to departure, a falling ticket price until all seats are sold?
I think there's a very good chance it is, and that the Treasury agrees.
This all works better with airlines because people tend to book well in advance, even business travellers. It doesn't work as much for rail, because if you offer £1 tickets on the day to fill empty seats the purchasers of £300 walk up Anytime tickets will swap to the £1 tickets, and all of a sudden you get a big revenue loss.
Where this would make money would be making Manchester-London £200 all Friday evening and all Saturday afternoon. That is what RDG want, plus to be able to bleat about it being £1 at 2pm on a winter Wednesday afternoon.
This feels like a non-story. We already have dynamic pricing on long distance and if they want to get around the off peak tickets acting as a cap - they just scrap off peak tickets or amend the hours. As seen on ECML. What am I missing?
The Treasury are blocking the trial because they are not prepared to countenance the possibility of a reduction in revenue, not because they are opposed to fares increasing.
This feels like a non-story. We already have dynamic pricing on long distance and if they want to get around the off peak tickets acting as a cap - they just scrap off peak tickets or amend the hours. As seen on ECML. What am I missing?
If you read the article very, very carefull you're missing that the RDG are being their usual sly self, namely that it's not just about cheap Advances at quiet times (which they can do now, and often do), it's also about being able to increase fares at busy times.
Thus, the core of it is likely to be moving to an Advances-only system for long distance travel. Hello, 250 quid Manchester-Euston on a Sunday evening.
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The Treasury are blocking the trial because they are not prepared to countenance the possibility of a reduction in revenue, not because they are opposed to fares increasing.
Well, the railway would certainly lose any revenue from me if they, as I suspect, removed Off Peak walk up fares at levels similar to what they are now. I thought, and still do think, the 5% increase on LNER is a bit de minimis, and I'm happy with singles and to say that the loss of the "middle tier" on LNER just brought it in line with the WCML, but a situation where it's only Advances, which is clearly what is being proposed, would mean massive increases to almost all leisure travel, and the effect of that is that I'd cease travelling by rail pretty much entirely bar London day trips from within the South East.
Maybe the Treasury, unlike the muppets at DaFT, are sensible enough to realise that that might well be the effect? Sure, most people do travel on Advances these days, but the key is not whether anyone buys Off Peak Singles (LNER) or Returns (anywhere else), it's that they exist and thus cap what can be charged at primary leisure travel times. Do people pay it on easyJet and Ryanair? Yes, but the thing there is that driving isn't a particularly good competitor to most flights - whereas it is a good competitor to pretty much all UK domestic rail travel aside from London commuting.
Can't that be achieved in the current system by designating Saturday Afternoon/Sunday Evening as 'peak' time and making 0 advances available? Avanti got rid of the peak on a Friday, so they must have the flexibility to change periods as they see fit. (To an extreme end, designate those trains as 1st class only, as well).
Can't that be achieved in the current system by designating Saturday Afternoon/Sunday Evening as 'peak' time and making 0 advances available? Avanti got rid of the peak on a Friday, so they must have the flexibility to change periods as they see fit. (To an extreme end, designate those trains as 1st class only, as well).
OLR TOCs can probably do what they like (hence why LNER tends to be the trial TOC for this sort of thing).
Private TOCs cannot; the times required for (Super) Off Peak regulated fares are part of their contract and they cannot unilaterally change them. Avanti will have had DfT permission to do the Friday thing.
Thus, the core of it is likely to be moving to an Advances-only system for long distance travel. Hello, 250 quid Manchester-Euston on a Sunday evening.
There is a limit to what the market will pay though. Flying (if an option) or driving becomes a serious contender, even for single traveller/driver, at those kinda prices.
It will be interesting to see if the upcoming LNER price hike on the NCL/EDI trains results in empty seats...
There is a limit to what the market will pay though. Flying (if an option) or driving becomes a serious contender, even for single traveller/driver, at those kinda prices.
As relatively few people travel in the "shoulder peak" where the swingeing increases are, I doubt it'll make that much difference. This has the potential to be a huge increase at the busiest long distance time of week for people who mostly have other options like car and coach.
Interestingly, I've just completed a survey from LNER asking about future names for a similar "demand let" pricing scheme.
Already you are seeing advance fares effectively capped on some LNER services at weekends to just under the cost of a flexible single (i.e. flexible single is £72, starting rate for advances being £70 for anything other than the early early morning trains or late night trains). Do away with that cap and £200+ for Edinburgh - London on a Sunday afternoon (where the demand is that great LNER run 3tph). Newcastle playing in a cup final at Wembley etc
I can see in the future some time restrictions coming in on those super off-peak tickets at weekends, maybe not valid on arrivals into London until 12:00 or departures until 11:00 with a similar block in the afternoon, similar to the SWR "Super off-peak/Evenings Out" fare structure
Thanks for that. Yes, this is bad; very, very, very, very bad. The end of the walk up railway and of fare regulation as a whole. Far worse than imagined, indeed, it appears to suggest loss of the Anytime fare in its present form, not just the Super Off Peak.
It MUST be stopped.
Certainly if this is introduced my long distance rail travel will completely cease. Perhaps time to consider upgrading to a decent motorway cruiser EV, as I'd imagine I'll be driving a whole lot more often.
I never thought I'd be praising The Treasury when it comes to rail fares but this, at least for now, is a very lucky escape.
When discussing this sort of thing we need to be very careful we're not duped. Offering cheap fares at quiet times sounds great, and there's nothing wrong with that in principle, but when in the same article it says fares could increase at busy times you just know it will lead to higher fares.
Fares regulation sets a cap on long distance off peak fares. Train companies/RDG/DfT/The Treasury would love to get rid of it. They tell us it's antiquated, belongs in the 1990s is outdated, not in passengers interests etc but they only say this so that they can increase fares at popular times.
If this was to happen don't expect to pay no more than £87 to travel from Edinburgh to London on a Sunday afternoon
London to Manchester for a weekend away, the maximum you'll pay for a return journey leaving on a Friday coming back on a Sunday is £103.90 but if fares regulation is scrapped expect to routinely be paying much. much more than this.
If fares regulation was scrapped it'd be dressed up as a win for passengers (just look at the misleading publicity on the LNER single leg pricing), we'd be promised loads of cheap Advance fares - and there would be lots for a short period of time. Then gradually they'd get raised in price or not offered on popular trains, or only 1 or 2 cheap tickets offered on each train.
The rail industry does not have a good track record when it comes to fares reform and I would urge forum members to be very wary of future proposals.
I never thought I'd be praising The Treasury when it comes to rail fares but this, at least for now, is a very lucky escape.
When discussing this sort of thing we need to be very careful we're not duped. Offering cheap fares at quiet times sounds great, and there's nothing wrong with that in principle, but when in the same article it says fares could increase at busy times you just know it will lead to higher fares.
Fares regulation sets a cap on long distance off peak fares. Train companies/RDG/DfT/The Treasury would love to get rid of it. They tell us it's antiquated, belongs in the 1990s is outdated, not in passengers interests etc but they only say this so that they can increase fares at popular times.
If this was to happen don't expect to pay no more than £87 to travel from Edinburgh to London on a Sunday afternoon
London to Manchester for a weekend away, the maximum you'll pay for a return journey leaving on a Friday coming back on a Sunday is £103.90 but if fares regulation is scrapped expect to routinely be paying much. much more than this.
If fares regulation was scrapped it'd be dressed up as a win for passengers (just look at the misleading publicity on the LNER single leg pricing), we'd be promised loads of cheap Advance fares - and there would be lots for a short period of time. Then gradually they'd get raised in price or not offered on popular trains, or only 1 or 2 cheap tickets offered on each train.
The rail industry does not have a good track record when it comes to fares reform and I would urge forum members to be very wary of future proposals.
Or only offered on a very limited number of services at weekends, using LNER for example only on the 0555 London Kings Cross to Leeds or 0615 London Kings Cross to Edinburgh on a Saturday morning, or trains which arrive into London after 11pm. The sort of times when you really need to be staying close to Kings Cross (or use Night Tube/Thameslink to reach). Or in Avanti (to be balanced) only on the 06:XX services to Glasgow/Liverpool/Manchester etc.
Or only offered on a very limited number of services at weekends, using LNER for example only on the 0555 London Kings Cross to Leeds or 0615 London Kings Cross to Edinburgh on a Saturday morning, or trains which arrive into London after 11pm. The sort of times when you really need to be staying close to Kings Cross (or use Night Tube/Thameslink to reach). Or in Avanti (to be balanced) only on the 06:XX services to Glasgow/Liverpool/Manchester etc.
If this was to happen don't expect to pay no more than £87 to travel from Edinburgh to London on a Sunday afternoon
London to Manchester for a weekend away, the maximum you'll pay for a return journey leaving on a Friday coming back on a Sunday is £103.90 but if fares regulation is scrapped expect to routinely be paying much. much more than this.
Well, I'd not pay more than that, no, I'd drive. I wonder is the Treasury actually seeing a lot more sense than David Horne, who appears to be pushing much of this along under some sort of brief of "make more money however you see fit"?
This sort of price gouging, and that's what it would be, only works when people have no alternative - as I said, the car is an alternative for almost all domestic journeys in some form.
If of course LNER want a bit more granularity they could just, you know, put the Off Peak Single back in...but clearly that's not what they're after, despite the spin (which like Alex Hynes, Horne is certainly good at).
Indeed. Before the pandemic Eurostar's revenues were higher than LNER's because of precisely this kind of variation. It's effective at squeezing money out of people, if you are purely driven by private profit.
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Because it's very difficult to sell a ticket to someone for £1 while also selling the same service to someone else for £250. If there's a small number of people prepared to pay the £250 it might generate more revenue to leave those seats empty if you can't segment the market as well as you'd like to.
Indeed. Before the pandemic Eurostar's revenues were higher than LNER's because of precisely this kind of variation. It's effective at squeezing money out of people, if you are purely driven by private profit.
True, but where E* differs is that you can't just drive instead for just the marginal cost of fuel and parking and a tiny amount of wear and tear - ferries are expensive too.
Charge silly prices and that's what people will do - and this is clearly intended to do that, because *reducing* prices however you like is easily doable with the present Advance fare system.
Because it's very difficult to sell a ticket to someone for £1 while also selling the same service to someone else for £250. If there's a small number of people prepared to pay the £250 it might generate more revenue to leave those seats empty if you can't segment the market as well as you'd like to.
That's the Virgin principle, i.e. why the Anytime Return from London to Manchester is £350. And I don't doubt that if they are talking about removing Anytime fares too, then that would, on the train arriving just before 9am and leaving just after 5pm, be £500 or even more.
This sort of price gouging, and that's what it would be, only works when people have no alternative - as I said, the car is an alternative for almost all domestic journeys in some form.
I wonder if that would be the argument they'd make in a CMA investigation, since price gouging is notionally illegal ("unfair business practice" is I believe what they call it).
Well, I'd not pay more than that, no, I'd drive. I wonder is the Treasury actually seeing a lot more sense than David Horne, who appears to be pushing much of this along under some sort of brief of "make more money however you see fit"?
This sort of price gouging, and that's what it would be, only works when people have no alternative - as I said, the car is an alternative for almost all domestic journeys in some form.
If of course LNER want a bit more granularity they could just, you know, put the Off Peak Single back in...but clearly that's not what they're after, despite the spin (which like Alex Hynes, Horne is certainly good at).
There's no way LNER will be reintroducing off peak tickets again. I suspect they can't believe their luck at all the positive media coverage they've had. Normally a 4% fares increase just a few weeks after the annual increase would result in a huge amount of negative publicity in the media. Instead, I don't think I've seen anything negative other than on this forum.
There's no way LNER will be reintroducing off peak tickets again. I suspect they can't believe their luck at all the positive media coverage they've had. Normally a 4% fares increase just a few weeks after the annual increase would result in a huge amount of negative publicity in the media. Instead, I don't think I've seen anything negative other than on this forum.
That's probably because single fare pricing DOES provide benefits even though it also carries downsides. I can't see any benefits of this proposal at all.
Plenty of posters seem to have been duped by the LNER single leg pricing hype despite it clearly being the thin end of the wedge. If posters on a well informed forum (and prominent travel journalists) have been taken in then most of the wider public will almost certainly be taken in too. The reality will only dawn when it is too late - i.e. after the cap has disappeared, followed shortly after by reasonably priced Advance fares at times they wish to travel.
I wonder if that would be the argument they'd make in a CMA investigation, since price gouging is notionally illegal ("unfair business practice" is I believe what they call it).
Please could you post the text in a quote, rather than a screenshot, so members can more easily read and respond to it (as I will).
There's no way LNER will be reintroducing off peak tickets again. I suspect they can't believe their luck at all the positive media coverage they've had. Normally a 4% fares increase just a few weeks after the annual increase would result in a huge amount of negative publicity in the media. Instead, I don't think I've seen anything negative other than on this forum.
Quite. A second fare increase in a few weeks (far more than 4% for some journeys) is a good thing apparently, despite the fact that single leg pricing could have been introduced without any increases.
You gotta laugh. All this talk of simplification of tickets and your attachment indicates they're introducing an all new type of LNER "flexible" ticket.
Quite. A second fare increase in a few weeks (far more than 4% for some journeys) is a good thing apparently, despite the fact that single leg pricing could have been introduced without any increases
When discussing this sort of thing we need to be very careful we're not duped. Offering cheap fares at quiet times sounds great, and there's nothing wrong with that in principle, but when in the same article it says fares could increase at busy times you just know it will lead to higher fares.
Quite. That was the argument when Advance fares were introduced and flexible tickets started to climb in price, and now Advance fares are the only reasonable fares on many InterCity flows. With the considerable reductions in the quotas of the lower-priced Advances, it effectively has been a long-term fares increase. I imagine this new system will be much the same.
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