First class -where's the profit?

[jon0844]

I find it amazing that TOCs haven't tried ways to get people into first class in off-peak times, with cheaper first class fares or on-board upgrades (like Weekend First).

Clearly DOO services like those from FCC couldn't offer the latter, but why not have a FC upgrade supplement for use between certain hours (marked on the ticket). If you're caught in FC without one, you're treated just as you would be right now for being in FC without a FC ticket.

The other benefit of a supplement is that when more and more people are able to use Oyster, this allows for people to travel first class when there's currently no way to use Oyster PAYG for travel in this class - and so I suspect some TOCs may have found that the convenience of using Oyster has stopped them being able to travel first class.

 

[tbtc]

Its a tricky balance.

To get people to pay a "50%" premium you need to keep First Class a separate product from Standard Class (I'll ignore the predictable stuff about Cattle Class/ Steerage).

Allow too many people to cheaply upgrade and you'll destroy part of the reason that existing First Class passengers choose to pay extra - you may even find them deciding to use Standard in future (and maybe pay a couple of quid to upgrade back to First).

I say this as a Standard Class passenger (who doesn't understand the point in paying an extra tenner for the sake of a cup of tea and a small packet of biscuits), but I can understand why TOCs are sometimes happier to have empty seats in First (despite people standing in Standard).

There's maybe scope for a Freakonomics style investigation into all of the different factors involved here - some people will be paying extra just to avoid sitting next to someone else (for example).

 

[edwin_m]

First Class does cost more to provide for the simple reason that a First Class coach contains fewer seats - around 48 for a Mk3 compared to 80+ for typical Standard layouts, so with all seats taken and allowing for extra on-board staff the cost per seat would be around twice as much. This is for the long-distance operators - for others the difference will be less as there is less extra space per FC seat and no staff dedicated to FC on-board service.

There is also a need to plan for some seats being empty after the morning peak, as someone who has paid over the odds for a FC walk-up ticket would be most upset at not getting a seat on whichever return train they choose to board.

Coach D in Virgin's 221s is a "dual-purpose" coach which can be used as First on those trains that need it but is otherwise declassified. If it is then it's a good one to make a beeline for - more space and free Wifi!

 

[jon0844]

On some Intercity services, why not have one carriage that allows cheaper upgrading - but not all?

Make it first class during the rush hours, then something like Standard Plus where you get the free Wi-Fi, a larger seat and possibly free tea/coffee. No lounge access or any other perks.

 

[Metrailway]

I also wonder whether the removal of noticeably more luxurious first class compartments has abetted the decline in first class profitability on the Southern Region, particularly during the off peak.

Yes. I have heard (from a very reliable source) that NSE considered making the 442s first class only trains. Although this didn't happen in the end, it does show how important first class travellers were back in the day.

First Class is far too expensive IMHO, especially considering the product offered nowadays is not that great. I have an old timetable from the 60s and the First Class fare was 50% higher than the Second Class fare. For Blue Pullman services, one had to pay a small supplement fee to travel. I do think there would be demand for a First Class only/Pullman IC service today but I guess due to the proliferation of MUs on IC services it would be a non-starter.

InterCity used to give a near first class service to the full standard priced ticket holder on some services (free food etc) to reduce cannibalisation of sales by advance/off peak tickets.

Anytime ticket purchases on IC services have been plummeting in recent years due to the proliferation of advance tickets, Maybe TOCs could emulate InterCity and introduce various perks, such as free food or even free/cheap upgrades to First, for Anytime ticket holders to combat cannibalisation.

 

[HST Power]

On some Intercity services, why not have one carriage that allows cheaper upgrading - but not all?

Make it first class during the rush hours, then something like Standard Plus where you get the free Wi-Fi, a larger seat and possibly free tea/coffee. No lounge access or any other perks.

I would like to see a three way class system similar to what you describe, where we have Standard, Standard Plus (or Premium if you like) followed by First Class.

Personally, I don't like the idea of using a coach for Standard as well as First. Nonetheless, I do like the idea whereby customers in Plus can get a drink, internet, a better seat and a bit of food. What we need is the market research to prove that such a venture would be successful.

Crucially, the offerings in Standard Plus will need to be sufficient to keep First Class exclusive, but ample enough to deter customers from staying in normal Standard with crisps and a roll from M&S.

I believe that this is the most difficult gap to bridge.

 

[jon0844]

Eurostar had Leisure Select, which used first class - but was a lot cheaper. Still had food and drink, but no lounge. Not sure if the menu was different than first though.

I am sure it would work and be quite lucrative.

 

[transmanche]

InterCity used to give a near first class service to the full standard priced ticket holder on some services (free food etc) to reduce cannibalisation of sales by advance/off peak tickets.

Silver Standard. (Well it was called that on the ECML.) I think it was free tea/coffee and biscuits only, but with at-seat dining available.

 

[D6975]

You can get some absolute bargains travelling first class off-peak. I recently did Bristol-Norwich, leaving TM at 10:30.
Second class advance was £24.50, first class advance was £34.50.
I couldn't believe it when it the FGW website came up with those fares. Needless to say I paid the extra tenner and must have got it back in drinks and snacks.

 

[MP33]

Todays Greater Anglia briefing.

This morning five in the 1st class compartment. Including two people who were best described as dull. Luckily with the bigger seats spread further apart, once the train went above a certain speed it was not possible to see or hear them.

This evening the total was seven, including two who joined mid way and were removed by the Inspector for having Standard Class tickets. They were only travelling for 10 minutes so why risk a penalty fare and possible prosecution.

 

[HowardGWR]

Todays Greater Anglia briefing.

This morning five in the 1st class compartment. Including two people who were best described as dull. Luckily with the bigger seats spread further apart, once the train went above a certain speed it was not possible to see or hear them.

This evening the total was seven, including two who joined mid way and were removed by the Inspector for having Standard Class tickets. They were only travelling for 10 minutes so why risk a penalty fare and possible prosecution.

What is the capacity of the GA compartment please?
--- old post above --- --- new post below ---

You can get some absolute bargains travelling first class off-peak. I recently did Bristol-Norwich, leaving TM at 10:30.
Second class advance was £24.50, first class advance was £34.50.
I couldn't believe it when it the FGW website came up with those fares. Needless to say I paid the extra tenner and must have got it back in drinks and snacks.

How far in advance did you book, and was it single or return? This is more like it! I suppose the full fare types (the Suits) would have no idea one was from the 'lower orders' unless one looked like that . I mean, I always assume the well-heeled pay what they do to get away from hoi polloi (or it's on the firm's budget). I cannot imagine anyone paying more than, say, £60, to go from Bristol to Norwich unless they can't drive (whether 'standard' or first).

I know the above contains some challenging remarks but when I read the East Coast 1st class thread, I wonder what planet the contributors have descended from. I didn't realise we had so many rich people.

 

[Bevan Price]

A 1st class ticket costing 50% more does not increase profit by 50% it increases it a lot more.

For example say a standard class ticket is £50 and a first class is £75.
Now imaging that the costs of a standard class ticket are maintaining the train,providing station facilites, fuel, maintaining the track, paying management staff, paying the cost of the train, checking tickets, providing security, all of those cost the same for first and second class,say £45 allowing them a 10% margin so they make a profit of £5 per customer.

Now 1st class has a few extra costs. "free" food, say £5 average, extra staff, say £3 per passenger per journey. Better seats, say £2 per passenger per journey over the lifetime of the seat.Total cost £55 giving a profit of £20 per customer. So a 1st class passenger is worth 4 times that of a standard class one even though they might pay only 50% more.

Clearly I made up those numbers but the point is correct.

But only in the short term. If standard class passengers regularly find they have to stand, some of them will desert the railway and either use alternative transport, or not bother to travel. At that point, you start to lose revenue - which may be more than the amount you receive from first class fares

 

[D6975]

My £34.50 BRI-Norwich was an advance first single, bought about 6 or 7 weeks before travel. On my return I spent the day in London, so the cost of 2 separate first advances was a bit too expensive. For the extra £10 I travelled first class, had 2 coffees, 2 teas, 2 hot chocolates, 2 bags of crisps, a small packet of biscuits and an orange juice. No too shabby I thought.

Ps I've noticed quite big differences in first advance fares on different routes, FGW and EMT seem to have the best bargains, although curiously tickets on FGW to destinations beyond London can sometimes be cheaper than a ticket to Pad.

 

[HowardGWR]

My £34.50 TM-Norwich was an advance first single, bought about 6 or 7 weeks before travel. On my return I spent the day in London, so the cost of 2 seperate first advances was a bit too expensive. For the extra £10 I travelled first class, had 2 coffees, 2 teas, 2 hot chocolates, 2 bags of crisps, a small packet of biscuits and an orange juice. No too shabby I thought.

Ps I've noticed quite big differences in first advance fares on different routes, FGW and EMT seem to have the best bargains, although curiously tickets on FGW to destinations beyond London can sometimes be cheaper than a ticket to Pad.

Thanks very much.
I tried the same thing for September 16th and indeed got a very favourable 1st class fare from Taunton to norwich (£52 for a midday train). I tried for Gatwick (to which I am likely to travel more often) and got a similar deal for £35 (upwards to £90 depending on departure, midday again was cheapest).

So in fact FGW are doing what I suggested in this thread they should do, namely give incentives to fill 1st class seats at slack times, but only on advance tickets, AFAICS.

As an aside, the problem with midday trains to Gatwick is that one's flight is probably in the early am so one needs a night in the typically crappy hotels there. Mind you, you would need that if you went by car plus you have the car park fee for a week or two.

 

[ex-railwayman]

Thing is though, many TOC's who utilise these silly new Multiple Units (Class 158 for example), cannot offer 1st Class because there isn't any built into the carriages. I regularly travel from Nottingham to Peterborough and after 25 years still find it impossible to obtain 1st Class accomodation, certainly after proper trains stopped running, Those who travel from Liverpool Lime Street to Norwich (across half of England) will never get this service even if they wanted it, yet, TOC'S won't budge on their preferred modes of transport and I've never understood why a small portion of 1st Class accomodation wasn't incorporated in the construction of these units, they had it on Class 101's, albeit mucky curtains and stained seatback covers, but, at least it was available.

Cheerz. ex-railwayman.

 

[bnm]

There should be no class on the trains, everyone should get the same service, all people using trains are equal.

Very Orwellian. But remember some people are more equal than others.

 

[TBY-Paul]

All these First Class threads remind me of the first time my wife and I travelled First Class. We were going to London for a week-end break, and it was the first time I had arranged it all myself on this new fangled internet thing (Late 90's or thereabouts), previously I'd organised trips through a travel agent.

I'd looked up the train fares from Thornaby to Kings Cross, which came up as something in the order of £90 each return (standard). Whilst checking the page an advert came with, "Darlington to Kings Cross from £59 return", so I changed the search criteria to DAR to KGX. This came up with fares from £69+ each, but with a "two singles might be cheaper" option. On checking this option the cheapest fares came back as an advance 1st single £22.50 each, provided we were willing to travel on the 9.59 out of DAR, and return on the 20.00 out of KGX. A slight change to our intended plans, but for the price it was worth it, total cost £90. This was a time when 1st advances had about 4 different levels, and something like 14-16 different price level altogether on a DAR-KGX fare.

Having never travelled "First" before and not wishing to look out of place, on the day, I dressed up accordingly, Jacket and Tie etc... Back then a 1st advance allowed use of the GNER first class lounges, which was another bonus. So naturally we made use it. All very civilised. When the time came to make our way along the platform, we boarded the same carriage as a the former leader of the Conservative party (as he was then). We were just so in awe of it all, and then to get served free drinks (Tea & Coffee) and biscuits, a couple of plebs mixing with the elite, we were living the dream.
At the time not, knowing how tickets were priced, we assumed standard was full'ish, and First was empty, hence why we got cheap tickets. This "theory" was backed up by the fact that there were only around 16-20 people in our carriage.
We arrived a KGX for our return journey in plenty of time, again suitably dressed in Jacket and tie etc., expecting a similar standard of clientele as our outward journey, we made our way to the First class lounge. You can imagine our surprise to find it full of Newcastle football supporter (Newcastle had been playing Arsenal in the live Sunday afternoon Sky match), to say "some" were the worse for wear after leaving the First Class lounge would be an understatement. They weren't drinking the free Tea & Coffee that's for sure. They like us must have found the cheapest tickets when booking were the 1st Advances. The journey back was "trying" for the staff on-board, and not the greatest of experiences in comparison to the outward journey, but it didn't put us off going first class on future trips (subject to price, of course).
A few months later GNER stopped access to the lounges, for first advance ticket holders. I always wondered if it was because of what happened that Sunday evening.

 

[edwin_m]

Several operators have had first class in 158s. From memory:

- Scotrail ones from new (later removed?)
- NSE then South West Trains 159s from new and still fitted
- CrossCountry/early years of Virgin, small fleet of units
- Northern Spirit (all units dedicated to Transpennine Express)

So it's certainly possible, though with varying levels of enhancement compared to Standard. It's a question of whether the TOC feels there is enough demand to justify reducing the capacity of a unit which is already running pretty full a lot of the time.

 

[broadgage]

Its a tricky balance.

To get people to pay a "50%" premium you need to keep First Class a separate product from Standard Class (I'll ignore the predictable stuff about Cattle Class/ Steerage).

Allow too many people to cheaply upgrade and you'll destroy part of the reason that existing First Class passengers choose to pay extra -----------.

Agree, it should not be made too cheap, and should definatly remain a seperate product.
First class off peak could reasonably be made a bit cheaper to encourage a bit more use.
Perhaps first class, off peak, walk up fares should be no more than twice the steerage fare on the same train, rather than 4 times or more as is the case at present.

I can understand somone paying £170 first on a rush hour train instead of £85 steerage. I find it worthwhile, and so do many others as the first class section is well used.
Off peak on the same route, steerage is about £40, a reasonable reduction in the off peak, but first is still £170 with no off peak reduction. A first class off peak, walk up fare of about £80 might encourage a bit more use, but still keep it an exclusive premuim product ?

 

[jon0844]

First class helps subsidise other fares so I don't see any reason to get rid of it, any more than I would on an airline, where percentages are ridiculous in terms of economy vs first.

But I do think there should be better use of first class at quiet times, either through more advance tickets, on board upgrades or some sort of 'leisure first' tickets.

 

[sprinterguy]

- Scotrail ones from new (later removed?)

It's still there on the Scotrail units that were delivered there when new.

 

[Buttsy]

Recently I went with a friend from Oxford to Cromer on an advance 1st (£30) and was sat in the 1st section of a turbo at Oxford in our walking gear and rucksacks. Suit sat down next to me with a harumph and got his travelcard out to London (£109). I think he was hoping for a ticket inspection to 'throw us plebs' out of 1st class. I was hoping for one for the opposite reason...

I'm travelling back from Aberdeen to Lonodn soon and having missed the £58 standard advance, was about to buy a £72 advance when I saw the 1st advance at £77. Needless to say I have the 1st class ticket!

Have also used 1st class from Manchester to Glasgow and back on TPE many times as it was only £10ish more than the standard advance.

I think that the TOCs generally get it right by pitching off peak advance high enough that it will deter some and encourage others to buy.

 

[tbtc]

It's still there on the Scotrail units that were delivered there when new.

...however, IIRC, those DMUs spend some time on routes with no First Class fares (like the Far North), so are effectively declassified?

 

[Crundles]

I think rail operators have always favoured 1st class services. Wasn't there something like three Acts of Parliament that forced companies to provide more affordable fares? As has been mentioned, even accounting for the extra costs associated with the provision of first class amenities, the profit margin of such fares is far higher. From what I've read it seems that, generally speaking, the costs involved in providing greater standard class capacity (e.g. rolling stock, station capacity, staff, maintenance etc) rises far more rapidly than the relatively linear increase in revenue. So I guess from an operators point of view if you can have a smaller train with fewer people all paying a higher price then there's more money it for you.

Either way, I'd say there's a good chance of a first class bench coming to a Pacer near you!

 

[Butts]

I think rail operators have always favoured 1st class services. Wasn't there something like three Acts of Parliament that forced companies to provide more affordable fares? As has been mentioned, even accounting for the extra costs associated with the provision of first class amenities, the profit margin of such fares is far higher. From what I've read it seems that, generally speaking, the costs involved in providing greater standard class capacity (e.g. rolling stock, station capacity, staff, maintenance etc) rises far more rapidly than the relatively linear increase in revenue. So I guess from an operators point of view if you can have a smaller train with fewer people all paying a higher price then there's more money it for you.

Either way, I'd say there's a good chance of a first class bench coming to a Pacer near you!

Any decent seat would be "First Class" on a Pacer

 

[LNW-GW Joint]

1st class tickets are also not regulated, so the TOCs have a completely free hand on pricing and service provided.
Cross-Country (Arriva not Virgin) promptly increased the margin above standard from 50% to 100% and so became the proud owners of the first £1000+ GB ticket price.
I can't believe they think their 1st class service service is worth that much.

 

[rebmcr]

Any decent seat would be "First Class" on a Pacer

1st on a Pacer is "Walking instead".

 

[tbtc]

1st class tickets are also not regulated, so the TOCs have a completely free hand on pricing and service provided.
Cross-Country (Arriva not Virgin) promptly increased the margin above standard from 50% to 100% and so became the proud owners of the first £1000+ GB ticket price.
I can't believe they think their 1st class service service is worth that much.

If people are prepared to pay for it, then it is worth it (in today's capitalist economy)