Fewer sea­son tick­ets.

Growth isn’t a given as com­muters buy fewer sea­son tick­ets

Rail (UK) - - Con­tents -

The lat­est rail traf­fic sta­tis­tics em­pha­sise that as­sump­tions about un­end­ing growth in pas­sen­ger de­mand can­not be taken for granted. The cur­rent as­sump­tion that jour­neys will con­tinue to grow by a min­i­mum of 2.5% an­nu­ally has failed to take place this year, which calls into ques­tion ca­pac­ity en­hance­ment plans to cater for this de­mand.

The re­sult for the sec­ond quar­ter of the cur­rent 2017-18 fi­nan­cial year rings alarm bells about sales trends. Although over­all growth in the econ­omy is nudg­ing 2%, rail pas­sen­ger num­bers fell. True, it was a mar­ginal fall of 1%, with num­bers re­duced from 433 mil­lion to 429 mil­lion, but within the over­all fig­ure there is a warn­ing of things to come.

Ad­vance fare pur­chases con­tinue their growth, with an in­crease of 8.7%, but they still con­tinue to make up less than 5% of tick­ets pur­chased by pas­sen­gers. What the Of­fice of Rail and Road, which col­lates the sta­tis­tics, de­scribes as or­di­nary tick­ets have a share of 24% for peak-hour travel and 36% for off-peak use, and these seg­ments grew by a com­bined 6.5%.

The de­cline is in the use of sea­son tick­ets. There was a 9.4% fall dur­ing the sum­mer months com­pared with the pre­vi­ous year, with mar­ket share fall­ing from 36% to 33% for a prod­uct that is used by a third of all rail users.

These are fares where price lev­els are con­trolled by the Gov­ern­ment. That pol­icy had its ge­n­e­sis at the time of privatisation, when there were con­cerns that pri­vately owned op­er­a­tors would ex­ploit the mo­nop­oly po­si­tion they held for com­muters trav­el­ling to larger conur­ba­tions.

But the no­tion of con­sumer pro­tec­tion is now a fic­tion. Price rises of 3.6% are be­ing im­posed in Jan­uary 2018, re­flect­ing the rate of an­nual growth in the Re­tail Prices In­dex in July 2017. It could have been worse, as in­fla­tion mea­sured by this in­dex in­creased by 3.9% in Novem­ber.

The pol­icy is part of a strat­egy that un­der­writes the abil­ity of the train op­er­a­tors to make ever- in­creas­ing pre­mium pay­ments for the right to op­er­ate ser­vices. But in mar­ket terms, it ig­nores the con­tin­u­ing weak­ness in the rate of in­crease for take-home pay (cur­rently 2.1% per an­num). As a re­sult, price rises are an un­con­scious re­turn to the pol­icy adopted by BR to price off de­mand if it be­came too ex­pen­sive to pro­vide the nec­es­sary ca­pac­ity.

The re­verse sit­u­a­tion is now the case. Bil­lions of pounds have been com­mit­ted to pro­vide ca­pac­ity in the an­tic­i­pa­tion of growth, but there is now the prospect that peak-hour train ser­vices will fea­ture large swathes of empty seat­ing.

With close to 1,750 mil­lion an­nual trips be­ing made in 2016-17, the level of fore­cast growth sug­gested that the na­tional net­work would need en­hance­ment to cater for close to 50 mil­lion ad­di­tional users an­nu­ally. The re­sult has been a ben­e­fit: cost jus­ti­fi­ca­tion for projects such as Thames­link and Cross­rail, as well as sta­tion en­large­ment at lo­ca­tions such as Water­loo, Read­ing and Glas­gow Queen Street.

This could turn out to be re­ac­tive plan­ning to trends that were not fully un­der­stood, as in the past eco­nomic growth did not re­sult in any sig­nif­i­cant in­crease in de­mand for rail travel dur­ing the pe­riod of BR stew­ard­ship.

The most ob­vi­ous dif­fer­ence af­ter privatisation has been the de­ter­mi­na­tion of train op­er­at­ing com­pa­nies to sell seats that were oth­er­wise un­used at off­peak times. This co­in­cided with the new phe­nom­e­non of a sales chan­nel cre­ated by the in­ter­net that al­lowed both ad­vance and or­di­nary ticket prod­ucts to be mar­keted to a wider au­di­ence. This is only part of the story, how­ever - it is clear with the ben­e­fit of hind­sight that a lot of other things hap­pened to make rail more at­trac­tive.

There has been a con­cen­tra­tion in city cen­tre eco­nomic ac­tiv­ity - in terms of em­ploy­ment, ed­u­ca­tion, re­tail and leisure, and in pub­lic ser­vice pro­vi­sion - that has mi­grated from smaller towns and ru­ral ar­eas. The rail prod­uct is ideally suited to city cen­tre travel, as faster jour­ney times are of­fered than is pos­si­ble on a con­gested road net­work, and there have been poli­cies to dis­cour­age the use of cars in cities.

A less de­sir­able eco­nomic fea­ture that has emerged is the rel­a­tive poverty of a younger gen­er­a­tion who of­ten do not have the dis­pos­able in­come to af­ford cars. The re­sult is greater de­pen­dence on pub­lic trans­port than was the case in the re­cent past.

It is a func­tion of Gov­ern­ment to take a longer-term view of likely eco­nomic trends, and ev­ery­one in the rail in­dus­try has been heart­ened by the place rail has oc­cu­pied in the al­lo­ca­tion of in­vest­ment to pro­vide im­proved con­nec­tiv­ity in Lon­don and in­creas­ingly else­where in the coun­try.

How­ever, this op­ti­mism has been tem­pered by the in­abil­ity of Net­work Rail to im­ple­ment planned in­vest­ment projects such as elec­tri­fi­ca­tion. Too much was taken on for the skills and ex­pe­ri­ence avail­able, and a catch-up is now tak­ing place with en­hanced work­force train­ing and re­cruit­ment that will hope­fully de­liver the £ 48 bil­lion bud­get in the next Con­trol Pe­riod (2019-24).

A sec­ond fail­ure is loom­ing that will re­quire a more com­plex re­sponse. This has to be laid at the door of the Rail Delivery Group (RDG), which must find prod­uct so­lu­tions that re­flect the chang­ing na­ture of de­mand for travel at af­ford­able prices. Noth­ing has been done to recog­nise that a 3.6% in­crease in con­trolled fares, fol­low­ing rises in pre­vi­ous years that have ex­ceeded what in­di­vid­u­als are earn­ing, can only ul­ti­mately re­sult in re­duced de­mand.

There is now the rev­e­la­tion that pas­sen­gers are be­ing sold tick­ets for ser­vices that will not run over the Christ­mas pe­riod, caused by a fail­ure of the in­ter­face be­tween NR’s elec­tronic Na­tional Rail Timetable and Dar­win soft­ware pro­vided by the RDG.

Not ev­ery­thing is gloomy. It was a rev­e­la­tion when look­ing at Christ­mas timeta­bles to see that dur­ing the four­day Padding­ton Christ­mas clo­sure Great West­ern is us­ing the new Chiltern in­fra­struc­ture by run­ning West of Eng­land ex­presses from Maryle­bone with a non­stop run via Ox­ford to Swin­don.

This re­sponse is heart­en­ing be­cause it coun­ters the view that there is an in­evitabil­ity that jour­neys can­not be un­der­taken in the event of route clo­sures. I don’t think en­gi­neers al­ways get that if you plan long pos­ses­sions, some who wanted to travel may not try again.

“There is now the prospect that peak-hour train ser­vices will fea­ture large swathes of empty seat­ing.”

Newspapers in English

Newspapers from UK

© PressReader. All rights reserved.