Project on Sleeper Services.

[Airline Man]

Hello, I'm new here so please go easy with me!

After thirty years in the airline industry with a wealth of experience in Yield Management and Customer Services I've grown sick of planes and I'm looking to move on.

I've been asked to do a 'project' by a rail company on UK sleeper services.

I've been given two questions.

1. Why don't sleeper trains make any money?

2. Produce a business plan for a Pullman style First Class only sleeper to run between Kings Cross and Aberdeen.

What I'd like to know is how many Mark 3 size carriages (around 75 feet) you can fit into Kings Cross? . I know that Euston is supposed to be able to fit the Caledonian Sleeper in with 16 coaches in. Also, say you had a 16 coach train with every compartment having a toilet, shower, TV screen etc would this cause power supply problems? Ie. Would everyone having a shower at the same time cause the loco to blow up or the overhead line to give up the ghost?

Can you think of any operational reasons why a train like this would be a challenge for a rail company or infrastructure provider?

I'm aware that with low occupancy rates in a sleeper (about 10 passengers) per carriage and the train sitting around doing nothing most of the time it can't make money unless fares are high and customer service levels justify a premium fare.

I'm looking at pitching fares just under the full fare on the airlines. I'm also aware that business travel dies away at holiday times so the train will have to work charters, say to the highlands or Cornwall etc.

Also, faster day time trains and low cost airlines have reduced the demand for overnight travel. My proposition is a business style service operating to Aberdeen directly competing against BA on a number of selected flights.

Any ideas at all about any of these? Sorry to be so long winded, don't know anyone on the railways. Loads of ideas swirling around in my head.

I'm pretty clued up on the economics side as I spent many years on the yield management and pricing teams with British Airways and I guess some operational problems are similar to airlines but would like an operational perspective on my question. My knowledge of actual railway operations are nil.

Many thanks for your help..

 

[wensley]

Hello, I'm new here so please go easy with me!

After thirty years in the airline industry with a wealth of experience in Yield Management and Customer Services I've grown sick of planes and I'm looking to move on.

I've been asked to do a 'project' by a rail company on UK sleeper services.

I've been given two questions.

1. Why don't sleeper trains make any money?

2. Produce a business plan for a Pullman style First Class only sleeper to run between Kings Cross and Aberdeen.

What I'd like to know is how many Mark 3 size carriages (around 75 feet) you can fit into Kings Cross? . I know that Euston is supposed to be able to fit the Caledonian Sleeper in with 16 coaches in. Also, say you had a 16 coach train with every compartment having a toilet, shower, TV screen etc would this cause power supply problems? Ie. Would everyone having a shower at the same time cause the loco to blow up or the overhead line to give up the ghost?

Can you think of any operational reasons why a train like this would be a challenge for a rail company or infrastructure provider?

I'm aware that with low occupancy rates in a sleeper (about 10 passengers) per carriage and the train sitting around doing nothing most of the time it can't make money unless fares are high and customer service levels justify a premium fare.

I'm looking at pitching fares just under the full fare on the airlines. I'm also aware that business travel dies away at holiday times so the train will have to work charters, say to the highlands or Cornwall etc.

Also, faster day time trains and low cost airlines have reduced the demand for overnight travel. My proposition is a business style service operating to Aberdeen directly competing against BA on a number of selected flights.

Any ideas at all about any of these? Sorry to be so long winded, don't know anyone on the railways. Loads of ideas swirling around in my head.

I'm pretty clued up on the economics side as I spent many years on the yield management and pricing teams with British Airways and I guess some operational problems are similar to airlines but would like an operational perspective on my question. My knowledge of actual railway operations are nil.

Many thanks for your help..

I'm happy to offer some thoughts on the Ops side via PM, bit tricky to go into detail on here. Drop me a note when you have a sec

 

[Dhassell]

VTEC Can have there HST Sets at 9 Coaches and with 2 Power cars at Each end. i would expect you could probably fit 10 or 11 Mk2's/3's Onto Kings X on the Longest platforms

 

[Airline Man]

I'm happy to offer some thoughts on the Ops side via PM, bit tricky to go into detail on here. Drop me a note when you have a sec

Thanks I'd love some insight into the Ops side on why such a train could be an operational nightmare via PM. Just some thoughts. My brain is swirling around!

 

[wensley]

Thanks I'd love some insight into the Ops side on why such a train could be an operational nightmare via PM. Just some thoughts. My brain is swirling around!

Drop me a message any time. You profile seems to be restricted so I' can't PM you

 

[QueensCurve]

I've been given two questions.

1. Why don't sleeper trains make any money?

2. Produce a business plan for a Pullman style First Class only sleeper to run between Kings Cross and Aberdeen.

What I'd like to know is how many Mark 3 size carriages (around 75 feet) you can fit into Kings Cross? . I know that Euston is supposed to be able to fit the Caledonian Sleeper in with 16 coaches in. Also, say you had a 16 coach train with every compartment having a toilet, shower, TV screen etc would this cause power supply problems? Ie. Would everyone having a shower at the same time cause the loco to blow up or the overhead line to give up the ghost?

Can you think of any operational reasons why a train like this would be a challenge for a rail company or infrastructure provider?

I'm aware that with low occupancy rates in a sleeper (about 10 passengers) per carriage and the train sitting around doing nothing most of the time it can't make money unless fares are high and customer service levels justify a premium fare.

I'm looking at pitching fares just under the full fare on the airlines. I'm also aware that business travel dies away at holiday times so the train will have to work charters, say to the highlands or Cornwall etc.

Also, faster day time trains and low cost airlines have reduced the demand for overnight travel. My proposition is a business style service operating to Aberdeen directly competing against BA on a number of selected flights.

Any ideas at all about any of these? Sorry to be so long winded, don't know anyone on the railways. Loads of ideas swirling around in my head.

I'm pretty clued up on the economics side as I spent many years on the yield management and pricing teams with British Airways and I guess some operational problems are similar to airlines but would like an operational perspective on my question. My knowledge of actual railway operations are nil.

Many thanks for your help..

The first question is easy. a full daytime passenger coach will hold 40-80 people and is the same weight as a sleeping car. A sleeping care contains only a few berths and costs the same amount to drag around the county. Additionally hit has to be serviced with bed linen etc. And that is before you consider labour intensive and therefore expensive practices like locomotive changes splitting, combining and marshalling sets etc.

Locomotives have a limited capacity to supply domestic power supplies (Electric Train Heating or ETH) loads on the the train. Sleeping cars generally make a high demand on this and the provision of generator cars might be an option.

It seems unlikely that overloading the ETH connections on the loco would overload the overhead wire since there would be discrimination in the protection circuits to prevent this and in any case the loads would be relatively small compared to traction demands.

I believe that the Scotish Government makes a heft subsidy to the Caledonian Sleeper and part of the business case may involve looking to sources of funding other than the fare-payer.

Alternatively you may need to see the extent to which the service would appeal to the abject wealthy!

 

[Airline Man]

Thanks, those sort of things came to mind. They would be targeting the business market to/from Aberdeen. Ie. The oil business. Fares would be pitched higher than the normal unrestricted First Class fare but just below the airlines. Of course a generator car would take up more space.

Oh would anyone know if the provision of a full catering service, makes a positive contribution. I'd be looking at charging for evening meals but the breakfast would be included in the price of the ticket. I'm aware that all of this adds to staff costs.

Some good thoughts so far. This operation has to be stand alone with no subsidy. Guess it will never happen but it's an exercise.

In some ways I'm looking at a night version of the Blue Pullman! And I only remember that from a train set as a child!

 

[tsr]

You have to consider the appeal of through ticketing and co-operative operations with other train operators. At present, Sleeper services are wholly operated by FGW or Caledonian Sleeper TOCs and, whilst there are unique quirks, are part of the same overall National Rail ticketing systems as others. This means that missed connections are compensated for; trains may be held (probably especially in Scotland) subject to connection policies; passengers can use the same ticketing system between any pair of National Rail stations; etc. Removing these benefits by adopting a different level of pricing and so on may mean that travel flexibility is removed for some passengers and other stakeholders, although it could be said that any new fares structure could - if done well - add transparency and simplicity for others. So there may be pros and cons on this front.

Even current "open access" operators have some considerable interoperability with the National Rail network ticketing system, with just a few issues which by no means affect all or probably the majority of users (eg. cross-TOC staff discounts). It sounds like you are distancing yourself from the "business run for the overall public benefit" concept (if not always reality) of current TOCs and moving towards "business run simply to provide luxury to a select few" which may or may not actually be lucrative. The privatised railway is one of the few places where the integrated network as a status quo can be a real benefit, with a balance between public benefit and upgradeable service at times.

 

[33056]

Drop me a message any time. You profile seems to be restricted so I' can't PM you

Think a new member needs to make 5 posts before being able to send and receive PMs.

 

[Airline Man]

Think a new member needs to make 5 posts before being able to send and receive PMs.

Okay. Thanks I'll just post a couple of times so I get to my 5 posts!
--- old post above --- --- new post below ---
This should be my 5th post, so hopefully it'll be okay now!
--- old post above --- --- new post below ---
Ok, try now.

 

[CyrusWuff]

Kings Cross has played host to the "Regional" Eurostar sets before, so platform length isn't too much of an issue.

The longest platforms are 1 at 360m to signal K287, and 6 at 312m to K275, so you could potentially run up to 16x20m vehicles (allowing 20m each for the loco and brake van)...though at that length you wouldn't be able to stop South of York.

 

[Bald Rick]

Similar theme to the 'could sleepers run through the channel tunnel' thread

http://www.railforums.co.uk/showthread.php?t=114955

My contribution was here

http://www.railforums.co.uk/showpost.php?p=2165059&postcount=73


A different scenario, but you will get the idea. Re running the numbers to this example, assuming a first class only, high quality, service, I reckon you would need to sell in the region of 80 tickets a night at £300 one way to break even, which is the BA fully flexible price. But very few airline passengers pay the fully flex price, and the reason they do so is for flexibility, which is difficult to offer for one train a night. In contrast, you can get a seat on any plane from Heathrow to Aberdeen tomorrow for around £200, some much less, and if you choose to go with the orange lot you can go first thing tomorrow morning for under £50.

Also bear in mind a night train up the ECML would see itself diverted fairly routinely, so the journey would be nudging 10 hours.

 

[Iskra]

My personal thoughts are, that if this train is to be profitable and sustainable, the business case needs to be strengthened by doing the following:

- The target market needs to be both business and affluent tourists. Therefore, a decline (either seasonal or permanent) in one market could be offset by the other. You also significantly increase the number of potential customers by doing this.
- The train should serve Aberdeen (business and leisure customers) and then continue on to Inverness (either a portion, or the full train, whichever is easier) to serve primarily leisure travellers ('gateway to the highlands' etc.). The Inverness portion would have to aim mainly at the leisure market as it would be quicker to go on the Caledonian. You could win over Caledonian Sleeper Customers based on the better service though. Again, by serving two destinations, you increase the amount of people you appeal to.

This train would need a lot of investment to get off the ground, thus a return on investment needs to be guaranteed.

Furthermore, the best way to get the train up and running (and also to work out how much this service would cost and return in revenue) would be to liase with Belmond and utilise their existing luxury sleeper train for scheduled services. You may also encourage them to market it as one of their ordinary luxury services for tourists? This would minimise a lot of risk for any investors.

http://www.belmond.com/royal-scotsman-train/

 

[Airline Man]

Similar theme to the 'could sleepers run through the channel tunnel' thread

http://www.railforums.co.uk/showthread.php?t=114955

My contribution was here

http://www.railforums.co.uk/showpost.php?p=2165059&postcount=73


A different scenario, but you will get the idea. Re running the numbers to this example, assuming a first class only, high quality, service, I reckon you would need to sell in the region of 80 tickets a night at £300 one way to break even, which is the BA fully flexible price. But very few airline passengers pay the fully flex price, and the reason they do so is for flexibility, which is difficult to offer for one train a night. In contrast, you can get a seat on any plane from Heathrow to Aberdeen tomorrow for around £200, and some much less.

Also bear in mind a night train up the ECML would see itself diverted fairly routinely, so the journey would be nudging 10 hours.

You are spot on about BA! I would be targeting an arrival into Aberdeen before the first flight arrived and a departure out of Kings Cross after the last flight has left. The early morning and evening departures out of LHR are generally the highest yielding flights with the highest proportion of full fare passengers.

I have no idea how much it costs to run a train to Aberdeen. Any approximation would be a great help. My 'guesstimate' and it's only a guess would be a break even load of 40 passengers paying around £300 one way. I was looking at a journey time of 9 hours plus taking into account diversions and passenger comfort.

As I said I'm an airline person with no knowledge of rail operations so forgive any ridiculous ideas and give me a bit of poetic licence. This is a paper exercise, but I've had some great feedback. Thanks, all.

 

[edwin_m]

Kings Cross has played host to the "Regional" Eurostar sets before, so platform length isn't too much of an issue.

The longest platforms are 1 at 360m to signal K287, and 6 at 312m to K275, so you could potentially run up to 16x20m vehicles (allowing 20m each for the loco and brake van)...though at that length you wouldn't be able to stop South of York.

There's a re-modelling of Kings Cross due sometime in the next few years, that may result in longer platforms or at least more platforms of the longest existing length.

 

[ainsworth74]

There's a re-modelling of Kings Cross due sometime in the next few years, that may result in longer platforms or at least more platforms of the longest existing length.

Are Network Rail biting the bullet on that? I was under the impression they've been wanting to do that (particularly the throat of the station) for a while but doing it will be quite an undertaking! Though I suppose once a number of GN services are off down to St Pancras that would help reduce the impact.

 

[Zamracene749]

The target (only ?) market with that kind of cash between Aberdeen and south thereof is the oil boys-north sea tigers- rig workers.
Their choppers back to shore are subject to regular delays and cancellations because of the weather, in particular from the more remote platforms.

This gives two distinct types of passenger at Aberdeen-

1- those that wish to get home as fast as possible. These are willing to pay 'walk up' flexible airline fares for the speed of the journey. They aren't likely to want to pay the same amount to have to wait all evening in Aberdeen for a train that then takes 10 hours, thus missing a day with their loved ones in each direction.

2- The tight ones. They go home by train, coach or car share. They don't care how long it takes as long as they have saved money on the trip. Are they likely to pay a premium for a luxury sleeper?

 

[sprinterguy]

Also, say you had a 16 coach train with every compartment having a toilet, shower, TV screen etc would this cause power supply problems? Ie. Would everyone having a shower at the same time cause the loco to blow up or the overhead line to give up the ghost?

The power draw of a lengthy sleeper train with all mod cons certainly is an important consideration. Of course, a locomotive cannot be used to power a train that has a total train supply rating greater than it is capable of providing. With sixteen carriages the current Caledonian Sleeper is quite close to the maximum rating for the class 90 locomotives that have been used for the past twenty years. I believe it is the high power draw expected of the new carriages that the Caledonian Sleeper will be receiving in 2018 that has helped to inform the decision to change to the use of class 92 locomotives under the new franchise, as these have a higher train supply rating than the older locomotives, having been designed with lengthy and power hungry European sleeper trains in mind.

 

[Airline Man]

My personal thoughts are, that if this train is to be profitable and sustainable, the business case needs to be strengthened by doing the following:

- The target market needs to be both business and affluent tourists. Therefore, a decline (either seasonal or permanent) in one market could be offset by the other. You also significantly increase the number of potential customers by doing this.
- The train should serve Aberdeen (business and leisure customers) and then continue on to Inverness (either a portion, or the full train, whichever is easier) to serve primarily leisure travellers ('gateway to the highlands' etc.). The Inverness portion would have to aim mainly at the leisure market as it would be quicker to go on the Caledonian. You could win over Caledonian Sleeper Customers based on the better service though. Again, by serving two destinations, you increase the amount of people you appeal to.

This train would need a lot of investment to get off the ground, thus a return on investment needs to be guaranteed.

Furthermore, the best way to get the train up and running (and also to work out how much this service would cost and return in revenue) would be to liase with Belmond and utilise their existing luxury sleeper train for scheduled services. You may also encourage them to market it as one of their ordinary luxury services for tourists? This would minimise a lot of risk for any investors.

http://www.belmond.com/royal-scotsman-train/

Some good points there! I'm anxious that it is to be seen as 'business' and not 'luxury'. Marketing a scheduled service as 'luxury' may not go down well with cost conscious accountants in today's times of austerity.

 

[Bald Rick]

You are spot on about BA! I would be targeting an arrival into Aberdeen before the first flight arrived and a departure out of Kings Cross after the last flight has left. The early morning and evening departures out of LHR are generally the highest yielding flights with the highest proportion of full fare passengers.

I have no idea how much it costs to run a train to Aberdeen. Any approximation would be a great help. My 'guesstimate' and it's only a guess would be a break even load of 40 passengers paying around £300 one way. I was looking at a journey time of 9 hours plus taking into account diversions and passenger comfort.

As I said I'm an airline person with no knowledge of rail operations so forgive any ridiculous ideas and give me a bit of poetic licence. This is a paper exercise, but I've had some great feedback. Thanks, all.

My estimate is double that, ie 80 pax per train @ £300 average to break even. Ie cost about £25k per train one way.

In terms of journey time, it's approx 7h10 by day train with 13 stops and running above 100 mph for most of the journey south of Edinburgh. Knock out 11 stops (you'll need some for crew changeovers) will save you half an hour, but travelling at 80mph max for first class comfort will add in another two at least. Maybe more - the curving rules north of Newcastle are somewhat exciting. Another hour to allow for a diversion, and you are perilously close to the ten hours between last LHR departure and first ABZ arrival and vice versa.

Personally I can't see over 5% of the London-Aberdeen air market do it at that price; which is what you need.

 

[Bishopstone]

I think most business travellers would struggle to get a £300 one-way fare charged to expenses.

If you can't snare the expense account brigade, you haven't got a business.

 

[Bald Rick]

I think most business travellers would struggle to get a £300 one-way fare charged to expenses.

If you can't snare the expense account brigade, you haven't got a business.

Agreed, for that sort of money I'd want a stamp in the passport.

 

[Airline Man]

The full unrestricted oneway fare on British Airways to Aberdeen is £378 and many firms are prepared to stump up for that for whereas the equivalent first class fare on Virgin East Coast (If I'm looking in the right place) is £230.50. There would appear to be a lot of room for a premium service priced between the two. I'm of the mindset that I'll charge as much as I can get away with!

 

[Chrism20]

Having lived in Aberdeen a few years ago I agree the first and last flights are always the busiest. I made a small fortune and earned a significant amount of points by voluntarily being offloaded those services plus I think I've been in every hotel along Bath Rd thanks to BA.

For companies who would use this type of service the price won't be the big thing. Flexibility and service will be the key IMO so you are looking at free cancellation until late on, decent gourmet food etc.

Someone mentioned extending to Inverness for tourism etc which would be good but if it was to be an Aberdeen only service I'd definitely be looking at starting the service at Dyce or even Inverurie given the amount of expansion out of Aberdeen.

 

[Airline Man]

Having lived in Aberdeen a few years ago I agree the first and last flights are always the busiest. I made a small fortune and earned a significant amount of points by voluntarily being offloaded those services plus I think I've been in every hotel along Bath Rd thanks to BA.

For companies who would use this type of service the price won't be the big thing. Flexibility and service will be the key IMO so you are looking at free cancellation until late on, decent gourmet food etc.

Someone mentioned extending to Inverness for tourism etc which would be good but if it was to be an Aberdeen only service I'd definitely be looking at starting the service at Dyce or even Inverurie given the amount of expansion out of Aberdeen.

I worked in BA's capacity management, one of our main functions was overbooking flights. 99.7% of the time we got it right, when we didn't we normally buy our way out of trouble by asking for volunteers to travel later and offering them generous compensation plus a hotel and meals if it involves an overnight stay. Of course airport staff tended to take the flack and hated us lot in head office for overbooking, it's a necessary evil though.

Thanks for the feedback.

 

[Bishopstone]

The full unrestricted oneway fare on British Airways to Aberdeen is £378 and many firms are prepared to stump up for that

Really? With oil at $60 a barrel and talk of cost cutting all round?

I assume we are talking about senior people, then? How many of these would even consider spending ten hours imprisoned on a domestic train with dodgy WiFi? I think it would be regarded as a mildly eccentric way of making this journey.

 

[edwin_m]

The power draw of a lengthy sleeper train with all mod cons certainly is an important consideration. Of course, a locomotive cannot be used to power a train that has a total train supply rating greater than it is capable of providing. With sixteen carriages the current Caledonian Sleeper is quite close to the maximum rating for the class 90 locomotives that have been used for the past twenty years. I believe it is the high power draw expected of the new carriages that the Caledonian Sleeper will be receiving in 2018 that has helped to inform the decision to change to the use of class 92 locomotives under the new franchise, as these have a higher train supply rating than the older locomotives, having been designed with lengthy and power hungry European sleeper trains in mind.

Also need to consider that the line is not electrified north of Edinburgh and even if the Scottish Government pushes ahead with its proposals it won't happen for a few years.

Diesel locomotives are much more limited in their "hotel power" because they have to generate it on board rather than just passing it through from the overhead line. As current designs of passenger diesel are quite lightweight, and parts of the route are hilly, two locomotives would probably be needed for a 16-coach train north of Edinburgh. The existing operation splits the train at Edinburgh so the shorter train is within the capabilities of one diesel. Alternatively a more powerful freight diesel could be used, but this would limit the speed and cannot provide "hotel power" so the train would need a generator on board.

Depending on timetable the diesels that bring the train south from Aberdeen could probably return north the same night with the train from London, but the electric loco south of Edinburgh would probably only do one leg each night.

 

[03_179]

My own personal view of the sleepers are that, to the general public, they are too expensive. I used to work in a travel centre selling all sorts of tickets and many customer would baulk at the cost of a ticket and the reservation cost.

We also used to try and sell Motorrail which also used to be expensive.

The Sleepers here are one or two occupancy (I think I am correct here) yet in Europe, e.g. travelling from Brussels to Vienna or suchlike, you have those and also 4 berth couchettes and 6 berth couchettes.

I have traveled from Oostende to Wien (albeit years ago) and the couchettes we had were comfortable, we used the 4 berth couchettes.

So a few questions/suggestions.

• Would the sleepers be better utilised by having cheaper fares?
• What about 4 or 6 berth couchettes as a cheaper alternative?
• What about Cross country sleepers as well?

 

[crewmeal]

It makes you wonder how long BA will be flying domestic routes in the future considering the popularity of cheaper rail fares. I can see them using the slots for expansion to the Far East at some stage.

 

[Bald Rick]

It makes you wonder how long BA will be flying domestic routes in the future considering the popularity of cheaper rail fares. I can see them using the slots for expansion to the Far East at some stage.

For a long time! Air fares are generally cheap too. You can fly to any of Glasgow, Edinburgh or Aberdeen today for less than £75 with squeezy, and around £100 with BA.