Fall in rail pas­sen­ger num­bers raises new fears for fran­chises

The Guardian - - NATIONAL - Gwyn Topham Transport correspondent

Rail pas­sen­ger num­bers in Bri­tain fell last year to 1.7 bil­lion, the big­gest de­crease since the 1990s pri­vati­sa­tion, cast­ing fresh doubt on the vi­a­bil­ity of strug­gling fran­chises.

Ac­cord­ing to fig­ures pub­lished by the Office of Rail and Road, us­age fell by 1.4% in the 2017-18 fi­nan­cial year, the first an­nual fall since 2009-10 and the big­gest since 1993-4.

Sea­son ticket sales have dropped by 9.2%, sug­gest­ing com­muters no longer place faith in the rail net­work, as fares have risen in­ex­orably while ser­vices are be­set by strikes and over­crowd­ing.

Fares rose by 2.3% in 2017 and a fur­ther 3.4%, the high­est in five years, in Jan­uary, which meant over­all rev­enue has con­tin­ued to grow for op­er­a­tors – though by only 2.3%, the in­dus­try’s low­est since 2000-01.

The de­cline in train us­age has been par­tic­u­larly large in the first three months of 2018, with 9m fewer jour­neys than in the same pe­riod in 2017. South Western Rail­way showed its low­est ever recorded fig­ure for the pe­riod, a 7% fall from last year, partly as­cribed to in­dus­trial ac­tion and the ad­verse weather in Fe­bru­ary.

The num­bers could spell more grim news for strug­gling First Group, which ad­mit­ted last month that it would lose £106m on its Tran­sPen­nine Ex­press fran­chise ow­ing to stag­nat­ing pas­sen­ger num­bers. It won the South Western fran­chise last year with a £2.6bn bid that its then chief ex­ec­u­tive, Tim O’Toole, said was “dis­ci­plined”, with clauses re­duc­ing its risk if the UK and re­gional econ­omy tanked after Brexit.

Last month First parted com­pany with O’Toole but said South Western re­mained prof­itable de­spite “chal­lenges”. Op­er­a­tors usu­ally pledge higher pay­ments to govern­ment in the later years of the fran­chise.

A spokesman for First said it had won the fran­chise with a fo­cus on qual­ity, with new trains and more ca­pac­ity to come, and its bid had not been the high­est in cash terms.

Con­cerns over fran­chis­ing are high, with Vir­gin Trains East Coast due to cease op­er­at­ing in nine days’ time after its own­ers, Stage­coach and Vir­gin Group, were un­able to meet their promised £3.3bn pay­ments with pas­sen­ger num­bers be­low fore­casts.

The East Coast fran­chise will be taken back into public sec­tor oper­a­tion, and the lat­est fig­ures will in­crease spec­u­la­tion that more fran­chises could fail. MPs have raised ques­tions over whether Abel­lio over­bid for Greater Anglia, which suf­fered a fur­ther 2% de­cline in pas­sen­gers last quar­ter, or Ar­riva for North­ern, where cus­tomer num­bers fell 9% in a strike-hit pe­riod.

An in­dus­try source said: “There were four or five fran­chise agree­ments which re­lied on mas­sive growth rates ... in­stead of which we are see­ing them in de­cline. There is a struc­tural prob­lem here which could dwarf the timetabling is­sues, be­cause it is more wide­spread.”

Labour said pas­sen­gers were be­ing priced off the rail­way. The shadow transport sec­re­tary, Andy McDonald, said: “With fares ris­ing three times faster than av­er­age wages since 2010 and se­vere dis­rup­tion across the net­work, it’s no sur­prise that we’re see­ing the big­gest drop in pas­sen­ger num­bers in 25 years.

“This not only wors­ens con­ges­tion and air pol­lu­tion and con­trib­utes to cli­mate change, it also threat­ens the sus­tain­abil­ity of the rail­ways [and] in­creases the like­li­hood of fur­ther bailouts, bank-rolled by the tax­payer.”

The rail in­dus­try in­sisted the drop was a blip.

Paul Plum­mer, chief ex­ec­u­tive of the Rail De­liv­ery Group, which rep­re­sents train op­er­a­tors and Net­work Rail, said: “There are over 1.7bn rail jour­neys made every year and de­spite some slow­ing down, this growth isn’t ex­pected to hit the brakes in the long term.

“While tech­nol­ogy may mean fewer peo­ple are trav­el­ling into work every day, any­one tak­ing the train into our ma­jor cities will know that in­vest­ment to run more trains is es­sen­tial.”

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