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Does the government have a position on OA operators?

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RailWonderer

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Following the thread in speculative about OA operators and the fact only a London based route can be profitable, I was wondering if politics or operational reasons like pathing gets in the way of proposals going forward. The GU one from Euston to Blackpool fell apart I think because they wanted to run 110mph class 90 hauled rakes which would not work on the 125mph WCML or it was Covid, please correct me.

The other question is does the govt not want a superior offer competing with them (e.g. LNER)? Lumo got around this by branding themselves as an alternative to Easyjet and a budget option to LNER though I'm not sure how the Grand Union service from Paddington to Cardiff is doing it.

Finally, is there anything stopping an operator from running a, lets say, all premium, first class only OA service with 4 coaches? Provided they thought it would make money would the DfT or Network rail have a reason to not allow it? Japan and other countries run premium trains on their lines, of course you would need the paths and indications the route would be profitable.
Edited for spelling
 
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zwk500

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Following the thread in speculative about OA operators and the fact only a London based route can be profitable, I was wondering if politics or operational reasons like pathing gets in the way of proposals going forward. The GU one from Euston to Blackpool fell apart I think because they wanted to run 110mph class 90 hauled rakes which would not work on the 125mph WCML or it was Covid, please correct me.
The GU was all set to go, then COVID meant they'd have taken 0 revenue. The paths were in for ages, IIRC.
The other question is goes the govt not want a superior offer competing with them (e.g. LNER)? Lumo got around this by branding themesleves as an alternative to Easyjet and a budget option to LNER though I'm not sure how the Grand Union service from Paddington to Cardiff is doing it.
The govt wants the competition because it believes either that it will make the Franchised tocs sit up and get serious or that the private companies will begin to take on more routes and the subsidised services can be cut back. The accuracy of this belief is open to debate.
Finally, is there anything stopping an operator from running a, lets say, all premium, first class only OA service with 4 coaches? Provided they thought it would make money would the DfT or Network rail have a reason to not allow it? Japan and other countries run premium trains on their lines, of course you would need the paths and indications the route would be profitable.
Not sure on this one, I suspect they could, or it might be that they need a token Standard Class area but could run 1st class heavy.
 

Bald Rick

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The GU one from Euston to Blackpool fell apart I think because they wanted to run 110mph class 90 hauled rakes which would not work on the 125mph WCML or it was Covid, please correct me.

GU pulled it as it wouldn’t have made them money In a post covid world. (My guess is that they saw the business market collapse, and knew their ORCATS share would reduce significantly)


Finally, is there anything stopping an operator from running a, lets say, all premium, first class only OA service with 4 coaches?

Nothing at all, other than economics.

The other question is goes the govt not want a superior offer competing with them (e.g. LNER)? Lumo got around this by branding themesleves as an alternative to Easyjet and a budget option to LNER though I'm not sure how the Grand Union service from Paddington to Cardiff is doing it.

it’s fair to say that Government is rather schizophrenic on this. Ideologically it wants competition, but financially it doesn’t want the outcome!
 

N1

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Open Access on the East Coast Mainline was encouraged by the Government alongside the re-tendering of the franchise following National Express East Coast collapse and it moved to the Operator of Last Resort

It is worth noting that Open Access operation was a legal requirement from the EU under REGULATION (EC) No 1370/2007 Single European Railway Directive 2012 2102/34/EU (Edited to correct EU regulation) . The government has made no indication that this will be repealed

The political idea behind it was that competition would help encourage passenger growth and help reduce subsidies for the ECML. The idea was that the intercity express programme as well as improvements to the station throat would create additional paths out of Kings Cross, and these paths would be partially used to increase the franchised passenger frequency but also reserve some for Open Access Applications for routes to Edinburgh (power upgrades to the North of the ECML would also be needed for increased electric operation as part of the IEP)

First applied for the paths in 2015 and were given them by the ORR in 2016, with other companies also applying for the paths, but couldn't start until 2021 until completion of the IEP and Kings Cross enhancement works

But The best-laid schemes o’ Mice an’ Men Gang aft agley, VTEC collapsed before any of the above was complete, and now the government has given away Open Access paths to compete against a state owned Operator of Last Resort.

After a year of Lumo operating Rail now beats Air for market share on Edinburgh to London. Whether this is down to competition between operators, improvements to the journey made by the IEP and ECML upgrades, more climate conscious travel patterns or a combination of the above is mostly not known or down to us to speculate.
 
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zwk500

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It is worth noting that Open Access operation was a legal requirement from the EU under REGULATION (EC) No 1370/2007. The government has made no indication that this will be repealed
I'm fairly sure the EU rules are based on British practice. Eurostar and Heathrow Express have been Open-Access since BR ended, Hull Trains started in or around 2000.
After a year of Lumo operating Rail now beats Air for market share on Edinburgh to London. Whether this is down to competition between operators, improvements to the journey made by the IEP and ECML upgrades, more climate conscious travel patterns or a combination of the above is mostly not known or down to us to speculate.
And is being discussed here: https://www.railforums.co.uk/threads/rail-beating-air-for-market-share-edinburgh-london.238710/
 

Watershed

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I was wondering if politics or operational reasons like pathing gets in the way of proposals going forward.
Usually a mixture of the two! There aren't many major routes that have spare capacity. Any even fewer have the untapped demand needed to allow prospective OAOs to show they would grow the market (to compensate for the revenue they would abstract).

The GU one from Euston to Blackpool fell apart I think because they wanted to run 110mph class 90 hauled rakes which would not work on the 125mph WCML or it was Covid, please correct me.
It failed because GC realised they wouldn't make any money on it in a post-Covid environment. It's interesting that they came to this conclusion so early on into Covid, but the fact that the launch of Lumo still went ahead shows that OA still has some potential.

The other question is does the govt not want a superior offer competing with them (e.g. LNER)?
The government says it wants more competition (and, in the GBR white paper, professed their support for OAOs) but equally it balks at any loss of revenue. If someone could come up with an OAO that didn't abstract any revenue, I'm sure they'd be happy for it to run. But that's rarely how these things work.

Lumo got around this by branding themselves as an alternative to Easyjet and a budget option to LNER
It's not so much the branding as the fact that they promised to grow the overall rail market - something which it would appear they've done reasonably successfully.

though I'm not sure how the Grand Union service from Paddington to Cardiff is doing it.
The latest Paddington-Cardiff/Swansea/Carmarthen GU application currently stands as rejected, though they've reapplied with another similar proposal.

Finally, is there anything stopping an operator from running a, lets say, all premium, first class only OA service with 4 coaches? Provided they thought it would make money would the DfT or Network rail have a reason to not allow it? Japan and other countries run premium trains on their lines, of course you would need the paths and indications the route would be profitable.
Nothing, apart from the fact that there simply doesn't seem to be the market for such services to run on a frequent basis. Clearly, there's a bit of a market for it (see the success of premium railtours) but probably not on a basis that could support a regularly timetabled service. The decision not to run th Settle-Carlisle HST 'Staycation Express' this year is ominous in this respect.
 

N1

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I'm fairly sure the EU rules are based on British practice. Eurostar and Heathrow Express have been Open-Access since BR ended, Hull Trains started in or around 2000.

I think it started with the EU, with the 1991 EU Directive 91/440, which was expanded on by the UK with the 1993 Railways Act.

I think the regulation I quote above is not the correct current one, which I think is actually Single European Railway Directive 2012 2012/34/EU !
 

Clarence Yard

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and now the government has given away Open Access paths to compete against a state owned Operator of Last Resort.

No, the government hasn’t. It was the ORR that granted the rights, not the DfT. The ORR is independent of the DfT.

If had been up to the DfT, LUMO would have not got the rights. The DfT were not at all happy at the formal ORR hearing, where they performed really badly.

At the moment, LUMO is getting most of its custom from the airlines. I see those figures.
 

Watershed

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The ORR is independent of the DfT.
Nominally yes, but we have seen the degree to which the DfT lean on the ORR (c.f. the rejection of the latest Welsh GU application - which failed only on the basis of a test for the 'absolute level of revenue abstraction' which the ORR magically invented on the DfT's insistence).
 

RailWonderer

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Nothing, apart from the fact that there simply doesn't seem to be the market for such services to run on a frequent basis. Clearly, there's a bit of a market for it (see the success of premium railtours) but probably not on a basis that could support a regularly timetabled service. The decision not to run th Settle-Carlisle HST 'Staycation Express' this year is ominous in this respect.
I'd like a Kings Cross to Carlisle via Leeds calling at Peterborough, Doncaster, Leeds, Skipton then all stations to Carlisle OA. I'm sure this would work with a morning and an afternoon departure with a 5 car IET or even a 68 hauled service. I can only dream.
 

Clarence Yard

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Nominally yes, but we have seen the degree to which the DfT lean on the ORR (c.f. the rejection of the latest Welsh GU application - which failed only on the basis of a test for the 'absolute level of revenue abstraction' which the ORR magically invented on the DfT's insistence).

They didn’t magically invent it - that was Yeowart “spin”. It’s been there for years and was one of the reasons why some of the OA schemes I drew up for GB Railways didn’t get anywhere. Back in those times we went and saw Philip O’Donnell and he said that the very marginal effect on GNER’s existing revenue was why he supported the Hull application but if it had been too much, it wouldn’t have been supported and therefore probably would have fallen.

So we took heed and didn’t push anything that had too high a level of initial abstraction, which ruled out a lot! I personally told Yeowart that I thought his Welsh application would fail on that basis but he didn’t believe me. Probably he thought it was just a “put off”, given my GWR connections.
 

Sonik

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Finally, is there anything stopping an operator from running a, lets say, all premium, first class only OA service with 4 coaches?
Looking at airlines you would have to say that generally the market votes the other way i.e. the likes of Ryanair/Easyjet have wiped the floor with full service airlines. Lumo shows that the same principal applies to trains. The exception is Emirates but they are fairly unique due to the geography of their hub, and they do not run small planes!

There is perhaps therefore an opportunity for a train operator to follow the Emirates model, with a small number of highly premium passengers generating the bulk of revenue and effectively subsidizing their standard class seats. But this would require a very premium travel experience and it's debatable if there is sufficient demand in this segment on UK routes.
 

WideRanger

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Japan and other countries run premium trains on their lines
In the case of Japan, I can only think of the cruise trains (aimed at the super-super rich), occasional extras for special occasions (a bit like charters in the UK), and on a small number of lines peak-flow 'liner' trains, where all seats carry a supplement. In that latter case, the critical point is that they are run by the main operators as extras for people who are willing to pay a bit more to avoid rush hour crush, with the added benefit of taking some people off the 'normal' trains. It's product differentiation, rather than competition.
 

tbtc

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Finally, is there anything stopping an operator from running a, lets say, all premium, first class only OA service with 4 coaches? Provided they thought it would make money would the DfT or Network rail have a reason to not allow it?

Are you talking about setting up a company to operate upmarket services that isn’t part of ORCATS and doesn’t accept “regular” tickets (or get any share of any TOC’s “cake”)?

In guess that’s The Jacobite that you could be describing, and it seems to work, despite running from a WHL station to another WHL station without having to avoid anywhere obvious (e.g. Holyrood didn’t insist that it had to provide something that ScotRail weren’t like “a Mallaig to Oban service which didn’t stop at Fort William” to ensure that ScotRail didn’t lose their Mallaig - Fort William income)

But very few lines really justify half a carriage of first class these days, yet alone making them 100% first class, maybe if I were going to look at a market that could justify fully first class train I’d consider something from Thetford to Liverpool Street (non stop from Cambridge to Stratford, yes, Stratford!) on the grounds that…

Whilst Cambridge to London seems a busy and prosperous market , it has done relatively basic trains serving it (okay, not everyone sits all the way on a Thameslink 700, but for various , Cambridge doesn’t have much “fast” running into the capital and therefore gets nothing particularly special in terms of trains, we seem to only put effort into comfort/ quality facilities if a train goes at 125mph. It’s obviously too short a journey for a Restaurant Car but I think that we could offer some “trimmings” that would go down well (a few tourists/ students/ business types with a few quid might prefer to wait for the train where they get “complimentary“ food at their seat (the occasional cream cake might have a crazy profit margin, even if they aren’t as long life as a bag of crisps) and a quieter atmosphere on board than some of the “commuter” trains that run from Cambridge to London with their frequent stops and/or “commuter” feel

Lumo/ GC/ HT are competing with long 125 trains that have great onboard facilities (please no tedious arguments about the seats again, stick them in the Seating Subforum!), whereas Cambridgeshire trains are really just competing with a 387/755 (perfectly decent modern trains, and I know that some people get very excited at using one particular door to enter a FLIRT, but a unit with ends doors and a service offering “freebies” and an upmarket refurb might find a gap in the market

Thetford is just to be seen to offer something that other TOCs currently don’t, without competing for the Norwich money, plus there’s a crossover there, it’s really about the Cambridge to Stansted/ Liverpool Street passengers but Thetford isn’t too far, and I think that you have to be seen to offer something “unique” to have a chance, get a local MP to get that they ought to back you etc. and it means serving Cambridge North too

Stratford? Well, nobody else is doing it from what I can see, plus I’m sure the Cambridge to Canary Wharf market would pick up a market of people who’d pay first class - if those two places aren’t upmarket enough to warrant it then we might as well give up! And Stratford is an increasingly important place in its own right these days, as well as the connections for Southend etc

Non stop from Cambridge to Stratford? Partly because I don’t think there’s anywhere big enough to demand a stop that Greater Anglia doesn’t use for Cambridge services. But mainly because feeling like a non stop service with end doors will set it apart a bit, whereas a first class ticket looks harder to justify on a services where you’re distracted by a dozen intermediate stops over a short distance - even if you get a terrible path on the West Anglia line, the ability to switch off mentally, kick back, enjoy that complimentary food and drink without the stopping/ starting and the frequent announcements and interruptions that so many intermediate stops means… it might be appealing to some (can’t get rid of announcements but a long non stop section means you can give “guests” a break (yeah, call them “guests” rather than “customers”, blow some smoke to their backside)

Now, like the thread about how to serve the Edinburgh “Sub”, I don’t think that what I’m proposing is really a priority, but if I had to find an example of a fully First Class service to suit the OP’s need (like an Apprentice task) then something a bit posher for Cambridge to London than the same EMUs that TSGN/Anglia use on much shorter services seems worth investigating

(the only alternative would be a limited stop train on a scenic/rural route where passengers otherwise have to put up with 1980s DMUs that feel like they stop everywhere, but it’s hard to offer anything particularly unique when the existing TOC serves everywhere already, and single track limits “spare” paths- maybe limited stop from Manchester to Aberystwyth though, in theory, given the students and tourists you should have Year round demand, maybe plus a complimentary connecting bus to portmerion and make a selling point of the lack of disruption caused by tow many minor intermediate stations)
 

Envy123

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improvements to the journey made by the IEP and ECML upgrades

Peterborough to London seems to consistently be 50+ minutes, as opposed to 45 minutes before, according to NRE departures before. Is the speed improvement only closer to Edinburgh or something?
 

MisterSheeps

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Maybe I am being naive, but what is wrong with abstracting revenue from incumbent TOCs? The OAO pays a track access charge, so it isn't as if NR lose out, and if there's a customer shift from the TOC they can simply cancel services, as happens with TOCs like TPE, Northern & AWC as late as 10pm the night before, with complere impunity.
 

zwk500

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Maybe I am being naive, but what is wrong with abstracting revenue from incumbent TOCs? The OAO pays a track access charge, so it isn't as if NR lose out, and if there's a customer shift from the TOC they can simply cancel services, as happens with TOCs like TPE, Northern & AWC as late as 10pm the night before, with complere impunity.
Because revenue abstracted from Franchise TOCs means the DfT have to cover the revenue gap, as OAO's are 100% private enterprise. If you cancel a service at 10pm you'll still be paying the driver and guard, and still have to maintain trains etc.
 

Watershed

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Maybe I am being naive, but what is wrong with abstracting revenue from incumbent TOCs? The OAO pays a track access charge, so it isn't as if NR lose out, and if there's a customer shift from the TOC they can simply cancel services, as happens with TOCs like TPE, Northern & AWC as late as 10pm the night before, with complere impunity.
The problem is that the lost revenue outweighs any savings the TOC will make by slightly reducing services.
 
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