Lines/Services which pay the way?

[Bartsimho]

I was thinking with all the talk about the railway always needing subsidies I was wondering which Routes, Services and/or Lines make more than they cost to operate and while this would be classified information it is good to speculate from the outside looking in. Of course with maintenance and services being completely separated it's very difficult to tell but I would expect the Main London Intercity corridors to make money but would there be any surprising ones which pay their way so to say.

 

[JonathanH]

I was thinking with all the talk about the railway always needing subsidies I was wondering which Routes, Services and/or Lines make more than they cost to operate and while this would be classified information it is good to speculate from the outside looking in. Of course with maintenance and services being completely separated it's very difficult to tell but I would expect the Main London Intercity corridors to make money but would there be any surprising ones which pay their way so to say.

This may be a useful previous fairly recent thread to answer your question. As you say it is complicated by how costs are allocated.

TOCs paying a premium back to the DFT / Treasury

Be interesting to know which ones are and should/ could they get more commercial freedom

www.railforums.co.uk

 

[MotCO]

I assume that Open Access routes pay their way, otherwise they would cease.

 

[Clarence Yard]

It’s not as simple as that. The Governments effectively subsidises all operators because they pay Network Grant directly to NR and indirectly “laundered” through their TOCs to NR as “Fixed Track Access”, so all that Operators only effectively pay marginal costs.

Recently, new OA entrants into the long distance IC market have had to pay some of the NR fixed costs as an Infrastructure Cost Charge (ICC).

It is highly dubious that any service group now meets its full costs of operation, once you take the considerable NR fixed costs into account. On the IC network, the ECML would probably come closest but the IEP contract costs haven’t helped here.

 

[61653 HTAFC]

I assume that Open Access routes pay their way, otherwise they would cease.

"Received Wisdom" on here is that all they do is abstract revenue from the franchised operator.

As for the wider question, one of the flaws of the Beeching Report was that it neglected the "network effect" of passengers using branch lines or local stoppers to connect into longer distance services.

 

[Sonic1234]

As for the wider question, one of the flaws of the Beeching Report was that it neglected the "network effect" of passengers using branch lines or local stoppers to connect into longer distance services.

Which probably doesn't show up in the ticket sales data. On long distance services out of London, the majority of tickets are e-tickets. With TfL's refusal to accept them, this suggests few people buy tickets from their local station.

 

[Dr Hoo]

"Received Wisdom" on here is that all they do is abstract revenue from the franchised operator.

As for the wider question, one of the flaws of the Beeching Report was that it neglected the "network effect" of passengers using branch lines or local stoppers to connect into longer distance services.

OAs do abstract some revenue but the ORR only approves applications that are not primarily abstractive.

The Beeching ‘contributory revenue’ myth refuses to die even after 60 years of rebuttal. The Reshaping Report clearly covers this in the case studies and worked examples.

 

[eldomtom2]

The Beeching ‘contributory revenue’ myth refuses to die even after 60 years of rebuttal. The Reshaping Report clearly covers this in the case studies and worked examples.

I note that at no point does the Report explain how it determined what level of "contributory revenue" would be lost...

 

[Dr Hoo]

I note that at no point does the Report explain how it determined what level of "contributory revenue" would be lost...

The Reshaping Report was a relatively consise 'conclusions' document, not a methodology statement. It had been worked through with many months of analysis.

 

[eldomtom2]

The Reshaping Report was a relatively consise 'conclusions' document, not a methodology statement. It had been worked through with many months of analysis.

And the documents that cover how "contributory revenue" was worked out are...?

 

[HSTEd]

I assume that Open Access routes pay their way, otherwise they would cease.

Unfortunately, they don't.
They benefit from artificially low infrastructure costs because a large part of the subsidy to the railway is laundered through Network Rail, so that the Government could (pre coronavirus) claim that franchises were profitable for the taxpayer. The same as freight operations which pay almost nothing in infrastructure charges.