TOCs seek more fares deregulation

[John @ home]

From The Observer:

"Train operators are pushing for easyJet-style extremes in ticket pricing with radical proposals likely to meet fierce opposition from passengers' groups. ...

Elaine Holt, chairman of government-owned East Coast, said a forthcoming review of fares by the Association of Train Operating Companies (Atoc) would recommend further deregulation of the system: "Fares need looking at overall. Atoc has put together a paper and within that is a recommendation for more airline-style pricing."

Holt's comments are significant because East Coast is controlled by the Department for Transport, which took over the London-to-Leeds-and-Edinburgh service last year after the previous incumbent, National Express, balked at the government's revenue demands. ...

The call for partial deregulation will affect off-peak fares, which, according to Virgin Trains, caused sardine-like conditions on evening services. The London-to-Manchester-and-Glasgow operator says services outside the peak period just after 7pm are becoming so crowded, particularly on Fridays, that hundreds of passengers are left by the side of the platform at Euston station at rush hour. "Any system that leaves 200 people on a platform on a Friday evening is not working," said a Virgin Trains spokesman."

http://www.guardian.co.uk/uk/2010/nov/07/rail-firms-offpeak-fares-deregulation

 

[flymo]

From The Observer:


The call for partial deregulation will affect off-peak fares, which, according to Virgin Trains, caused sardine-like conditions on evening services. The London-to-Manchester-and-Glasgow operator says services outside the peak period just after 7pm are becoming so crowded, particularly on Fridays, that hundreds of passengers are left by the side of the platform at Euston station at rush hour. "Any system that leaves 200 people on a platform on a Friday evening is not working," said a Virgin Trains spokesman."

So basically as I read it: Virgin Trains are saying their peak fares are so expensive that people wait for the first off-peak service and then Virgin complain about it. Then Virgin want to put up the off-peak fare to pretty much match the peak fare to alleviate the ovecrowding on the off-peak services.

Would that be the gist?

 

[Dennis]

From The Observer:

Elaine Holt, chairman of government-owned East Coast, said a forthcoming review of fares by the Association of Train Operating Companies (Atoc) would recommend further deregulation of the system.....

.....will affect off-peak fares, which, according to Virgin Trains, caused sardine-like conditions on evening services. The London-to-Manchester-and-Glasgow operator says services outside the peak period just after 7pm are becoming so crowded, particularly on Fridays, that hundreds of passengers are left by the side of the platform

Couple of interesting points raised by this. Firstly, Ms Holt seems confident that further deregulation will occur - presumably the members of ATOC have been pushing hard for this, making it an inevitable outcome of the review.

Secondly, VTs pricing structure is clearly wrong if hundreds of people really are being left behind because they cannot board the first off peak trains. How crowded are the peak trains? Is there a case for reducing ticket prices on these to encourage more use?

Thirdly, what is "airline style pricing"? Is that where ticket prices become a complete lottery depending on when and how you book? Does it restrict you to travelling on specific trains - making frequent, clockface based timetables pointless? Does is penalise passengers who want the flexibility to decide on the day when and where they want to travel? Or do they allow travel to a place where the sun always shines?

 

[mumrar]

I'm confused. It talks about busy trains after 7pm, but then says hundreds are left behind during rush hour, so isn't that the peak period?

Without a massive overhaul of the ridiculous amount of different fares and their restrictions, I think this idea is a very bad thing. I don't think further deregulation will be in the customer's interest, and will used to charge ever more ridiculous prices, even in the Off-Peak.

 

[John @ home]

presumably the members of ATOC have been pushing hard for this, making it an inevitable outcome of the review.

Don't confuse a trade association with a regulator. ATOC's purpose is to represent the interests of the TOC - think of it as their trade union. ATOC demanded the end of fare regulation last time, and no doubt they will do so again. The crucial issue will be how the coalition government choose to implement their pledge: We are committed to fair pricing for rail travel.

How crowded are the peak trains?

For long-distance routes, not very at present.

Is there a case for reducing ticket prices on these to encourage more use?

A very good social case, but this would need more, not less, regulation.

Thirdly, what is "airline style pricing"?

Your guess is as good as mine.

Is that where ticket prices become a complete lottery depending on when and how you book?

That's a pretty good guess!

Does it restrict you to travelling on specific trains - making frequent, clockface based timetables pointless?

Yes.

Does is penalise passengers who want the flexibility to decide on the day when and where they want to travel?

Yes.

Or do they allow travel to a place where the sun always shines?

That's a very interesting idea. The sun has always shone every time I've been to Helmsdale. But there may be a few problems in sending all the trains there.

 

[Fred26]

Query. How can you say 'your guess is as good as mine' and then agree with everything Dennis said? I find that quite interesting.

 

[swt_passenger]

Virgin uniquely allow anyone using a rail card with an offpeak fare to travel on any train, AFAICT. So presumably they can turn up when they feel like it, Friday afternoon/evening or whenever. Isn't that a bit of an own goal if they really want to spread the capacity?

What they want to do is move as many people as they can from Offpeak to Advance.

 

[Metroland]

Train operators are pushing for easyJet-style extremes in ticket pricing with radical proposals likely to meet fierce opposition from passengers' groups.

East Coast and Virgin Trains, the UK's largest long-distance train companies, want to mirror the airline industry by charging higher prices for in-demand services, while lowering fares for less crowded trains.

Elaine Holt, chairman of government-owned East Coast, said a forthcoming review of fares by the Association of Train Operating Companies (Atoc) would recommend further deregulation of the system: "Fares need looking at overall. Atoc has put together a paper and within that is a recommendation for more airline-style pricing."

Holt's comments are significant because East Coast is controlled by the Department for Transport, which took over the London-to-Leeds-and-Edinburgh service last year after the previous incumbent, National Express, balked at the government's revenue demands.

Holt said the proposals fell short of completely deregulating long-distance fares. Under the current regime, increases in the cost of off-peak turn-up-and-go fares, formerly known as savers, are capped at one percentage point above inflation. East Coast and Virgin Trains believe that an unwieldy fares structure exacerbates overcrowding by herding passengers on to trains departing shortly after the peak period ends.

One way of spreading demand more efficiently between peak and off-peak services, they argue, would be to lift the caps on some of the most popular off-peak walk-up fares and charge more.

Train operators would like a system closer to the structure used by low-cost airlines such as easyJet and Ryanair, which offer prices of just a few pounds for off-peak tickets – rising to hundreds of pounds nearer the date of departure.

Holt said the rail proposals did not constitute a free-for-all despite the fact that peak fares, apart from season tickets, would not be subject to price caps: "East Coast would support deregulation of certain fares. To me the fare structure is very complicated and we think there are ways of simplifying it."

The call for partial deregulation will affect off-peak fares, which, according to Virgin Trains, caused sardine-like conditions on evening services. The London-to-Manchester-and-Glasgow operator says services outside the peak period just after 7pm are becoming so crowded, particularly on Fridays, that hundreds of passengers are left by the side of the platform at Euston station at rush hour. "Any system that leaves 200 people on a platform on a Friday evening is not working," said a Virgin Trains spokesman.

Fares remain politically sensitive, however, especially with increases of inflation plus 3% scheduled from 2012.

The rail user watchdog warned that a combination of rising off-peak fares and a book-ahead-only railway would make Friday night travel unaffordable and damage the economy. "You will find that Friday evening travel will become too expensive for many people," said Ashwin Kumar, rail director at Passenger Focus. "And when you have the possibility of being able to just turn up and use the train, that increases your travel options and carries economic benefits. Train operators have not analysed what that flexibility gives the economy."

The government is committed to reducing its £5bn annual rail subsidy but the £6bn contribution from the fare-payer must rise to fill the gap.

A Department for Transport spokesperson said: "Regulated fares play a vital role in protecting passengers' interests. Any moves to deregulate fares would need to ensure passengers' interests are adequately protected." Atoc said it was considering a range of proposals but its fares study had yet be finalised.

http://www.guardian.co.uk/uk/2010/nov/07/rail-firms-offpeak-fares-deregulation

 

[yorkie]

I'm confused. It talks about busy trains after 7pm, but then says hundreds are left behind during rush hour, so isn't that the peak period?

Well, 7pm is the new "rush" hour (interestingly they say it is outside of "peak" but is "rush"), I guess they are defining "peak" as when people are prepared to pay the highest prices, and "rush" as when a rush of people try to travel (because the fares reduce from only being affordable by rich businessmen or people on expenses, to being affordable by the general public). It certainly is confusing.

So yes, they want to raise the off peak price to deter people from travelling at busy times, because the busiest trains are at times when the fares aren't ridiculously high.

I think this is why they allow Railcard holders on any train with Off Peak tickets. The peak time trains are not so well loaded and they want to fill some of those empty seats, yet still charge businesses a whopping £262 for a standard return to Manchester, which only people with more cash than braincells would pay given the price reduces to £66.20 after 1845.

Without a massive overhaul of the ridiculous amount of different fares and their restrictions, I think this idea is a very bad thing. I don't think further deregulation will be in the customer's interest, and will used to charge ever more ridiculous prices, even in the Off-Peak.

Yes, I agree totally!

 

[Metroland]

EDIT, as someone beat me to it on this, so I double posted somewhere else

Thirdly, what is "airline style pricing"? Is that where ticket prices become a complete lottery depending on when and how you book? Does it restrict you to travelling on specific trains - making frequent, clockface based timetables pointless? Does is penalise passengers who want the flexibility to decide on the day when and where they want to travel? Or do they allow travel to a place where the sun always shines?

Airline pricing is purely demand priced and (usually) pre-book. Higher prices where there is more demand, lower prices for less demand (even if those fares are loss leaders) to spread the load.

The advantage for the TOC is overall revenue usually increases. The aim is to get each service at least 70% full, therefore every one is profitable. Also there is less overcrowding complaints.

The advantages for the customer, is you can get some very cheap fares off peak, although expect to pay more during the peak. It's likely to be all pre-book as well, therefore you lose (most?) walk on flexibility.

I suspect, the TOCs may lobby to cut services that do not get filled and increase them where there is the demand (as the airlines do), but that would be a matter for the DFT.

This all goes back to the debate whether you want to run the railways as a profit making entity OR public service.

 

[Zoe]

Another issue is that the peak periods are so wide these days. Some TOCs have an evening peak period from 3 PM to 7 PM. It may be that train from 3 PM to 4 PM were some of the busiest as people wanted to get out of London before the peak period started but I think you will always find the last off peak train will be busy. How long will it be before someone wants the peak period to start at 2 PM?

 

[yorkie]

Virgin uniquely allow anyone using a rail card with an offpeak fare to travel on any train, AFAICT. So presumably they can turn up when they feel like it, Friday afternoon/evening or whenever. Isn't that a bit of an own goal if they really want to spread the capacity?

No, it's quite the opposite. The trains at "peak" time are lightly loaded because they cost astronomical amounts to travel on them. Some businesses are prepared to pay these daft sums, and as they are prepared to pay, Virgin want to keep charging them such sky high fares! The solution to get more people to use these lightly loaded expensive trains is to allow Railcard holders to be able to use them on Off Peak tickets. Most business people who travel such long distances (probably managers) will be aged something like 40-55 and won't be bringing their kids with them, so not eligible for any railcard. Yes, there may be some high flying young businessmen aged only 25 who have a need to do Manchester-London often, and there may be some aged 60+ toward the end of their career, but not many, and Virgin have obviously decided to take the hit on those, as the vast majority of people who need to travel for businesses will be paying the £262 fare.

It's certainly unusual but I can see what they're trying to do.

What they want to do is move as many people as they can from Offpeak to Advance.

Exactly! They will increase the off peak return fare from London to Manchester to maybe £100, or even £120. They will then hope to sell more Advance fares, even at £35-45 each way.

If I was London Midland, I'd be in discussions with Northern and other operators to create "Rte: Not Virgin" through tickets from places like Manchester to London with a change at Stoke, to undercut Virgin's ludicrous prices. I can also imagine the coach companies would see an opportunity to increase their market share.

Deregulation of off peak fares will also cause more anomalies, e.g. where an operator charges a very high price for A to B, and another operator charges a lower price from A to C via B. Yes these anomalies already exist, particularly for travel at 'peak' times, but there will be even more if deregulation of off peak fares happens, and they will apply at all times, too.

 

[Metroland]

I think TBH all TOCs will eventually want to move to smart cards and demand based pricing. It's going to be an interesting debate, because it's likely that if you have money you can travel on whatever service you like, if you don't have the money, you are going to be limited to the more off peak services.

Though I would hope the TOCs don't leave seats unfilled during the peak, because £400 headline fares to Manchester and 20% full trains doesn't serve anyone.

In the past the railway would have responded to demand by adding more coaches/more lines, as they do in Europe where they have a much more mature attitude to public service and subsidy.

We're obviously going for the market led approach, like in most other things, where if you have money I'm already jack and if not, you're at the back of the queue.

 

[Zoe]

I think TBH all TOCs will eventually want to move to smart cards and demand based pricing. It's going to be an interesting debate, because it's likely that if you have money you can travel on whatever service you like, if you don't have the money, you are going to be limited to the more off peak services.

A move to smartcards could also see the end of unlimited travel season tickets. It would remove the need for people to have buy a ticket at the station every day and would allow TOCs to get extra revenue by charging for individual journeys.

 

[12CSVT]

The biggest fear is the real possibility that the ConDem government could bow to ATOCs wishes.

If anything like this does happen, rail travel would become unaffordable to those on low incomes (was this why jobseekers were told to get on the bus during the Tory conference ?)

 

[yorkie]

A move to smartcards could also see the end of unlimited travel season tickets.

This hasn't happened in London.

If we did get a smartcard system, I'd want assurances on various issues, this would be one of them, but there is no evidence that unlimited travel season tickets would not be available on them.

It would remove the need for people to have buy a ticket at the station every day and would allow TOCs to get extra revenue by charging for individual journeys.

It would allow more flexibility. The TOCs would probably moan at singles being half the price of returns (which is a pretty important principle of smart card ticketing, and this was implemented in London).

 

[Zoe]

This hasn't happened in London.

Not yet but we are still in the trasition period as paper tickets are still available. Depending on the politics of the day in the future it would be quite easy to withdraw unlimited travel once everyone is on Oyster.

 

[yorkie]

In the past the railway would have responded to demand by adding more coaches/more lines, as they do in Europe where they have a much more mature attitude to public service and subsidy.

There is a Fridays Only additional on East Coast (1930 to NCL) and West Coast (1846 to PRE) however these don't go far enough, there should be a couple more. I'm sure the likes of Cargo D could provide the coaching stock. When the fitting of CCTV to EC's trains is complete, the EMT HST currently in use by EC could be used for a Friday additional.

Also if Virgin really have problems with trains around 1900, then what they can do is re-name the Off Peak as Super Off Peak, designate that the "regulated" fare, make it valid from around 1930. The Off Peak then can be increased in price accordingly. Not that I want them to do this, but this is an option that other TOCs have taken and it does not require 'deregulation'. The excuses that Virgin give are absolute nonsense, because the fares suddenly decrease from £262 on the 1840 to Manchester, to £66 for a train 20 minutes later to Manchester. Who is going to pay £200 extra for the sake of 20 minutes? Someone who is prepared to do that may as well put the £200 in a bin as that's just throwing money away (or, more sensibly, give it to charity!)

 

[Failed Unit]

To add another angle to this debate, what is the % of each kind of ticket sold?

If you look at the network as a whole the rush hour is mainly season tickets, so changes to the off-peak will do little to ease demand here. A majority of flows have NO AP tickets anyway, so routes like Edinburgh - Glasgow which have vast number of people travelling each other have the choice between peak and off-peak.

On IC services for leisure I have not used an walk on ticket for quite a while, I can plan to avoid the peak quite well, but for business I want the flexibility to return when I want, that is rails main advantage to me over air! If they move to the airline model where you are on business and stuck with your booked service then I may as well fly. It is nice that if you meeting finishes at 1500, you know you can just get the next train home.

But as most other posters have stated, you are travelling away to Manchester on a Friday evening, you have worked all day. Of course you are going to wait until the first off-peak train is, with the current difference in price you would be crazy not to! I agree this could be extended until 9pm if they just keep the high prices.

Even the more local level we have the same problem. Take Edinburgh to Glasgow. The last service in the peak is the 0900, a 6 car train which doesn't normally have a very high load. The first off-peak is the 0915 a very overcrowded 3-car service. If Scotrail move this to 0930 then the overcrowding will move with it. The difference in price isn't that big but a leisure traveller will wait.

We have 2 problems really. On IC fairly empty trains in the peak as people can't afford them, with overcrowding straight afterwards (but fairly empty in first ) In the SouthEast full train in the peak (of season ticket holders) a slight lull, then full again as the off peak happens.

I don't see how airline style ticketing will help, it will remove the best point of rail flexibility, and considering that we already have lots of empty seats in the peak on IC routes, it already is failing!

 

[Zoe]

It's getting to the point where Off Peak tickets on some routes are not affordable never mind Anytime fares. The TOCs would like us all to book in advance. The theory is that the earlier you book the cheaper the fares are but this removes the flexibility and somewhat contradicts the theory behind high frequencies on some intericty routes.

 

[Failed Unit]

It's getting to the point where Off Peak tickets on some routes are not affordable never mind Anytime fares. The TOCs would like us all to book in advance. The theory is that the earlier you book the cheaper the fares are but this removes the flexibility and somewhat contradicts the theory behind high frequencies on some intericty routes.

Exactly, I don't know what the maximum train length is on the WCML but why bother with 9 car pendo's every 20 minutes when you can have a 12 car every 30? Better use of capacity and now everyone is using AP's you only have 1 train per day anyway

The say high frequency timetables gets people out of cars - true, but if you then don't give them reasonable priced flexiable tickets they get back in again!

 

[Dennis]

The theory is that the earlier you book the cheaper the fares are but this removes the flexibility and somewhat contradicts the theory behind high frequencies on some intericty routes.

And don't forget that flexibility includes not just the time the journey is being made but also loss of break of journey opportunities, flexibility of connection times (important to do the shopping if on train catering is non-existent or not up to scratch) and in some cases, the ability to vary the route or operator used.

Anyway, if the operators want to tie me into fixed trains at lower cost rather than encouraging me to pay a little more for the flexibility of walk on tickets, that is their financial loss. I simply don't like trawling for hours on the web, looking for the best deals / combos / times and then being tied to a single service with no flexibility.

Combine this with my dislike of paying some of the unreasonably high walk on fares and they are losing custom, not filling empty trains.

Moving on, as an extension to the whole idea of yield management, if they are so keen on it, why can't walk on fares fares for 'regulatory' first (and to a lesser extent last) local trains be dirt cheap? These trains are often seriously empty but no attempt seems to be being made to fill them.

Finally, all this this BS about fares simplification is nonsense; by introducing the variable pricing associated with 'airline style ticketing', the choice of fares is being expanded immensely. That's not simplication, it's adding to the confusion.

 

[Metroland]

The biggest fear is the real possibility that the ConDem government could bow to ATOCs wishes.

If anything like this does happen, rail travel would become unaffordable to those on low incomes (was this why jobseekers were told to get on the bus during the Tory conference ?)

You been on buses lately? They are even more expensive than the trains! Sometimes with fares up to £2.50 a mile, 4-5 times the cost of motoring. This is with 60% of the cost paid for by the government.

What will really happen is people will be forced into cars, and our towns and cities will be snarled up and be less nice places to live for everyone. But that's okay, long as it's making a profit.