Passenger numbers vs revenue

[yorksrob]

If you cut the Hastings Line peak fares by a third you'd be undercutting fares from Tonbridge and Sevenoaks where demand has largely recovered. If you've ever commuted on the classic lines since HS1 you'd know that your country service starts to brake at Grove Park so it can come to a Halt at a Red Signal for 5 mins to let suburban services cross in Front. You then go signal to signal until past St John's where you Jog to London Bridge for the post Thameslink 2 track section to Waterloo East. If you ran fast from Tonbridge you'd just wait at the Lewisham Signal for 10 mins!

Alternatively, you could have fares increasing beyond Tonbridge and Sevenoaks by much smaller increments so that they're frontloaded to the London end (but not undercut) but you still get an increasing discount the further out you get. Off-peak period returns in the area seem very hefty for the classic lines (over thirty quid for a day return from London to Ashford !).

With regard to Grove Park, perhaps they could shove more of the suburbans along the slow lines instead.

 

[jayah]

If you have a regular season ticket, why should your low per-journey price be massively subsidised by people paying more for walk up fares?

Why should cheap advance tickets be subsidised by walk up fare payers?

As a railway passenger why should you be subsidised by the tax payer at all?

Hopefully you can see the point I’m making.

== Doublepost prevention - post automatically merged: 1 Jul 2022 ==



As someone who travels on trains all over SE England, virtually every day, I can confirm this is complete nonsense.

Govia helpfully produce timetables colour coded according to seat availability. There are two shades of green, the darker indicating even more available seats than even a regular green.

Epsom to Victoria and London Bridge has 6tph and from 0900 to 2000 on weekdays, not a single station stop on a single service manages to elevate into the lighter green.

Very similar on other routes. Even in the peaks trains are only busy for a few stops and empty a few stops further out.

The West Coastway on Saturdays has almost every train into Brighton from 0900-1530 red or dark orange and for half the journey, not just a couple of stops.

 

[DJ_K666]

It's the inflexibility of it that I don't like. The whole knowing what train you want 3 months ahead and being fixed to that train. Then if its cancelled and you're told to get another one the TOCs act like the sky fell on their heads.

I'd rather put in walk up fares for on any train going your way. And a Single/Return/Saver/Season fare structure. None of this off peak, anytime, super advance airline style pre booked over complicated nonsense. You go to the station, buy a ticket to station X, get on the first train that came along, travel, get off it and done.

Call me old fashioned but it worked .

Call me cynical but I think they're trying to catch people out to fine them.


By the way my hypothetical trip to Sheffield is now £120 if I go in 3 weeks. Absolute rip off. And they're supposed to be discouraging car use

 

[WiredUp]

Agree, reasonably good value walk on fares, cheaper and very cheap advance tickets.

 

[DelW]

Trains can be cheaper than even just the fuel cost of driving, without having to use inflexible advances. I recently did a long-weekend trip from south east England to north west Wales. Driving the 600 mile round trip, even with quite an economical car, would have been over £100 on petrol alone, against an off-peak return (with railcard) at £84. The off-peak restriction only excluded a few very early trains on the outbound leg, and none of the remotely practical ones on the return. Door to door the train was a bit slower, but much more relaxing than five hours or more of mostly motorway driving each way.

 

[mrmartin]

Trains can be cheaper than even just the fuel cost of driving, without having to use inflexible advances. I recently did a long-weekend trip from south east England to north west Wales. Driving the 600 mile round trip, even with quite an economical car, would have been over £100 on petrol alone, against an off-peak return (with railcard) at £84. The off-peak restriction only excluded a few very early trains on the outbound leg, and none of the remotely practical ones on the return. Door to door the train was a bit slower, but much more relaxing than five hours or more of mostly motorway driving each way.

Agreed. Think this is being overlooked a tad. Also every time people I know do a journey of that distance they get badly delayed somewhere on the road - way more often than train problems. Plus you've got parking to worry about.

Obviously cars do have their pluses but not many journies would be more economical to do by car now with fuel prices.

 

[Bald Rick]

The current high fuel prices have certainly shifted the equation on car vs rail.

 

[Mikey C]

The current high fuel prices have certainly shifted the equation on car vs rail.

Indeed, surely rail fares will need to go up, seeing that trains either use diesel which is rocketing up in price, or electricity, much of which is made from gas...

 

[OrangeJuice]

Indeed, surely rail fares will need to go up, seeing that trains either use diesel which is rocketing up in price, or electricity, much of which is made from gas...

That will presumably happen next January/March when the next fares rise is taking into account inflation now (is it July's?)

 

[Trainbike46]

Indeed, surely rail fares will need to go up, seeing that trains either use diesel which is rocketing up in price, or electricity, much of which is made from gas...

Doesn't network rail have a (very) long term contract for electricity, and therefore pays a fixed unit price independent of current market market price variations?

And while the diesel price has certainly gone up, diesel use has dropped significantly (and will continue to do so) due to the replacement of HSTs/class 22x/class 180 with bimodes on LNER/GWR/Avanti/Hull Trains/EMR. I'm sure the new diesel stock for Northern/GA/TfW is more efficient than what it replaced as well.

So it's probably not as bad as it appears on first glance

 

[paul1609]

Doesn't network rail have a (very) long term contract for electricity, and therefore pays a fixed unit price independent of current market market price variations?

And while the diesel price has certainly gone up, diesel use has dropped significantly (and will continue to do so) due to the replacement of HSTs/class 22x/class 180 with bimodes on LNER/GWR/Avanti/Hull Trains/EMR. I'm sure the new diesel stock for Northern/GA/TfW is more efficient than what it replaced as well.

So it's probably not as bad as it appears on first glance

I've previously posted on here that the average inflation that heritage railways are seeing is way in excess of RPI maybe 40 %, I very much doubt that this is much lower for the mainline railway. I rather expect that fuel and power contracts are based on market plus arrangements and even if these costs are fully hedged the future hedging is now very expensive.

 

[Trainbike46]

I've previously posted on here that the average inflation that heritage railways are seeing is way in excess of RPI maybe 40 %, I very much doubt that this is much lower for the mainline railway. I rather expect that fuel and power contracts are based on market plus arrangements and even if these costs are fully hedged the future hedging is now very expensive.

Unfortunately it seems you are correct; though it appears to be much more complicated than your post suggest: https://www.google.com/url?sa=t&rct...2017-03.docx&usg=AOvVaw23SXoid3Y9BQZVsKXS60H_

The most key bit is:

It is a flexible contract and the only element fixed at the outset was the management fee. All other cost elements are passed through by EDF Energy once the actual rates are known.

Though the point about reduced diesel use stands

== Doublepost prevention - post automatically merged: 6 Jul 2022 ==

The graph below shows the reduction in diesel use on LNER (around 80% less). While the drop won't be the same on all operators (I suspect less on GWR, but might be bigger on Avanti as more diesel under the wires) there will be large drops on other operators as well

 

[Llandudno]

Doesn't network rail have a (very) long term contract for electricity, and therefore pays a fixed unit price independent of current market market price variations?

And while the diesel price has certainly gone up, diesel use has dropped significantly (and will continue to do so) due to the replacement of HSTs/class 22x/class 180 with bimodes on LNER/GWR/Avanti/Hull Trains/EMR. I'm sure the new diesel stock for Northern/GA/TfW is more efficient than what it replaced as well.

So it's probably not as bad as it appears on first glance

I am pretty certain diesel use has reduced significantly seeing as though most TOCs are running a reduced timetable, not to mention all the short notice cancellations…!

 

[Bald Rick]

Indeed, surely rail fares will need to go up, seeing that trains either use diesel which is rocketing up in price, or electricity, much of which is made from gas...

Traction fuel and electricity is a relatively small proportion of the railway cost base, about 3-4%.

 

[dk1]

Traction fuel and electricity is a relatively small proportion of the railway cost base, about 3-4%.

I can honestly say that I have heard nothing about driving trains efficiently in any mode as a response to the rising costs. Some drivers where awarded shopping vouchers for using the least amount of energy on electric traction but that all died a death a few years ago now.

 

[paul1609]

Traction fuel and electricity is a relatively small proportion of the railway cost base, about 3-4%.

What about non traction electricity?

 

[Trainbike46]

What about non traction electricity?

Non-traction electricity is usually negligible compared to traction electricity.

According to Network Rai:

Traction electricity: £400 million annually
Non-traction electricity: £60 million annually

source:

Energy Purchasing | Safety Central

 

[Nicholas Lewis]

Non-traction electricity is usually negligible compared to traction electricity.

According to Network Rai:

Traction electricity: £400 million annually
Non-traction electricity: £60 million annually

source:

Energy Purchasing | Safety Central

NR has a ten year contract with EdF for traction electricity that isn't linked to the day ahead pricing which is largely driven by the gas price as most generation is Combined Cycle Gas Turbines but this contract expires next year.

 

[JonathanH]

The current high fuel prices have certainly shifted the equation on car vs rail.

That will no doubt be put back in balance in a big way in January. Question really is why train fares aren't going up in September to take account of the much higher costs the railway now faces, or to bring forward part of the January increase.

Presumably even some of the fuel hedging that operators have had will come to an end with much higher negotiated prices going forward.

 

[Nicholas Lewis]

That will no doubt be put back in balance in a big way in January. Question really is why train fares aren't going up in September to take account of the much higher costs the railway now faces, or to bring forward part of the January increase.

Presumably even some of the fuel hedging that operators have had will come to an end with much higher negotiated prices going forward.

First Group runs a big hedging programme for it bus and rail operations and was well covered for this year but has diminishing cover for future years.

We currently have 87% of our FY 2023 exposure hedged at 37.5p per litre and FY 2024 is currently 53% hedged at 43.3p per litre

From there annual results. Im guess thats Red diesel pricing.

I would expect all the others to have some level of hedging in place but your right in the long run they will all run out of cover.

 

[Mikey C]

I've previously posted on here that the average inflation that heritage railways are seeing is way in excess of RPI maybe 40 %, I very much doubt that this is much lower for the mainline railway. I rather expect that fuel and power contracts are based on market plus arrangements and even if these costs are fully hedged the future hedging is now very expensive.

Agreed

While there is a headline RPI/CPI rate, it's energy costs which are REALLY shooting up, something which will seriously affect all transport operators.

 

[mrmartin]

Agreed

While there is a headline RPI/CPI rate, it's energy costs which are REALLY shooting up, something which will seriously affect all transport operators.

Post above suggests that energy is only 3-4% of the cost of running the railways. Even if it triples temporarily it's not the end of the world.

 

[E27007]

We are discussing the return of passenger numbers and ticket revenue in general terms, being slightly more specific, what is the numbers as a % comparing pre-covid/post-covid for 1st class and for standard class tickets? 1st class tickets have been the "cash cow" providing the railway with a lucrative income measured in profit per passenger. If the railway starts to cut train length formations by a single carriage per train, eg a 9 car Azuma trimmed to 8 cars, and mothball coaching stock, would it be a 1st or a standard class carriage that would be cut from the formation?

 

[dk1]

We are discussing the return of passenger numbers and ticket revenue in general terms, being slightly more specific, what is the numbers as a % comparing pre-covid/post-covid for 1st class and for standard class tickets? 1st class tickets have been the "cash cow" providing the railway with a lucrative income measured in profit per passenger. If the railway starts to cut train length formations by a single carriage per train, eg a 9 car Azuma trimmed to 8 cars, and mothball coaching stock, would it be a 1st or a standard class carriage that would be cut from the formation?

There would possibly be first converted to standard rather than any mothballing. It’s not really considered as coaching stock in these fixed formation days.

 

[Bald Rick]

We are discussing the return of passenger numbers and ticket revenue in general terms, being slightly more specific, what is the numbers as a % comparing pre-covid/post-covid for 1st class and for standard class tickets? 1st class tickets have been the "cash cow" providing the railway with a lucrative income measured in profit per passenger. If the railway starts to cut train length formations by a single carriage per train, eg a 9 car Azuma trimmed to 8 cars, and mothball coaching stock, would it be a 1st or a standard class carriage that would be cut from the formation?

this is a misconception. First class travel was not the lucrative cash cow; it is about 7-8% of all fare income, and more than half of it is Leisure travel which has held up well.

The high profit cash cow was medium to long distance commuting (15-100 miles), on season tickets, principally to London. The bottom has fallen out of that market, down by around 60-70%, and it has not been replaced by an increase in daily tickets which are now roughly at pre covid levels. The research I’ve seen is that half of Pre covid commuters are now at their expected level of (reduced) travel, and a further 15% do not expect to return to commuting at all.

I do not expect fixed formation trains to be reduced in length to save money. The cost of doing so would far exceed the lost revenue opportunity.

What is more likely is fewer trains overall. As we have seen.

 

[E27007]

Reading the above, income is currently around 83% of pre-covid, that's 17% down. Add inflation for fuel/'leccy.

The employees are looking for a 7% pay rise. [corrected, source Daily Mail]

Who is going to pay?

I followed the link "data tables" in post #8, and passenger revenue does not appear to be 83% of pre-covid. For the most recent year, Income is around £6bn per annum , which is the revenue level of year 2006.
Revenue was £10.7bn to £ 10.9 bn for each of the years prior to Covid, currently the revenue is around £1.7bn per quarter, therefore way below 82%, in fact significantly less than 65% of the pre-covid years.

 

[Watershed]

I followed the link "data tables" in post #8, and passenger revenue does not appear to be 83% of pre-covid. For the most recent year, Income is around £6bn per annum , which is the revenue level of year 2006.
Revenue was £10.7bn to £ 10.9 bn for each of the years prior to Covid, currently the revenue is around £1.7bn per quarter, therefore way below 82%, in fact significantly less than 65% of the pre-covid years.

Which dates are you taking these figures from?

Revenue is certainly down quite a lot, but not 35% down.

 

[E27007]

Which dates are you taking these figures from?

Revenue is certainly down quite a lot, but not 35% down.

From post #8, follow the link marked "data tables". An ORR page opens, scroll down and look for a list and open table 1211 "passenger revenues by sector", a spreadsheet will open. The data for revenues by year and by quarter may be examined.
PDF attached, the figures in the end column are all sectors passenger revenue in millions
examples:
All sectors total passenger revenues for the year commencing April, ending March :
2014 £10.3bn
2015 £10.7bn
2016 £10.9bn
2017 £10.8bn
2018 £11.2bn (the peak)
2019 £11.0bn
2020 £2.0bn
2021 £5.93bn

 

[Watershed]

From post #8, follow the link marked "data tables". An ORR page opens, scroll down and look for a list and open table 1211 "passenger revenues by sector", a spreadsheet will open. The data for revenues by year and by quarter may be examined.
PDF attched, the figures in the end column are passenger revenue in millions

The latest figures there are for January-March this year, when there were still Covid restrictions to various degrees. Passenger numbers were severely depressed during the earlier part of that period by the messaging and the prospect of lockdowns, leading to an average of 65% of pre-Covid numbers.

The strikes have had a deleterious impact recently, but during the last full month for which the DfT have published final figures (20 May to 19 June), passenger numbers averaged 87% of pre-Covid levels.

So you would expect, broadly speaking, for revenue to now be closer to £2.2bn per quarter, which is a much healthier figure merely taking things back to where they were in 2011.

Of course, the issue is that costs are not at 2011 levels...

 

[Clarence Yard]

I was quoted an immediately pre-strike figure that revenue had recovered to around 75% of pre-COVID levels for the same period in 2019/20. Ridership was above that but there had been a marked shift in proportion to the cheaper tickets.

With costs as they are, that’s going to give the DfT a bit of a financial headache, unless something has been factored into their 2022/23 budget to cover the shortfall.