The economics of the Lowlander have always interested me: I've always assumed the majority of custom comes from Edinburgh and Glasgow (given population distribution across the Central Belt), and both of those are cities with plenty of flights (and realistically, for many you can get up at 6am and get on a flight down in time for 9am, v. having maybe seven hours on a train and probably closer to six hours sleep).
I live in the central belt and Flying is WAY more hassle than the sleeper. For the first flight you have to be at the airport early to park (and pay through the nose to park the car), get through passport control (never quick, and getting slower) and the obligatory 45 mins before the flight sitting around. Add in 30 mins to the airport and 30 mins to get up and ready. After that, get into the city but only the expensive airlines fly to London City. Go cheap and you're an hour getting in from Stansted / Luton / Gatwick / Heathrow. For me, impossible to get into London for a 9am meeting. 10 is just about achievable.
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Leave home late, get the sleeper, arrive Euston before 7am, leisurely breakfast on the train, shower, miss the madness on the tube and be anywhere for 8.30 without any rush.
No competition.
Getting back is worse. Flying means being out of the city by 6pm - no later than the late day-train really. If you want to do anything in the evening, work late or drinks and dinner, Sleeper is the only way. Back at Euston 11pm, train, bed. Done.
Maybe I just don't like getting up very early and rushing around. Even the 1st class ticket is well worth the absence of hassle and certainly no more expensive than going down the night before and getting a hotel.