THE continuing effects of the recession have been revealed in the latest financial reports from owners of train operating franchises.
Go-Ahead Group said passenger numbers on Southeastern have grown only 0.7 per cent since the start of the year, down from 2.7 per cent in the last quarter of 2008.
Its GoVia joint venture with Keolis, which also operates Southern and London Midland services, carries more passengers than any other franchise owner. “Clearly there has been a fall-off in demand,” said Keith Lude-man, Go-Ahead’s chief executive.
Two days later share prices of all the quoted franchise owners took a knock after Arriva disclosed its Cross-Country franchise could need govern-ment support within two years.
“The principal underlying impact of the recession … is slower passenger revenue growth rates in parts of the business, most significantly in CrossCountry,” Arriva said in a trading statement. “If this continues, CrossCountry will benefit from revenue protection mechanisms contractually available from 2011.”
A few days later it emerged that several train operators were planning to increase unregulated fares by up to 11 per cent. Those changing unregulated fares to some extent include CrossCountry, National Express East Coast, First Great Western, East Mid-lands Trains and First Capital Connect.
A couple of days after this news, Network Rail’s chief executive Iain Coucher told The Financial Times that passengers could be “priced off” the railways by high fares.
“If people are genuinely not travelling because of high fares, that’s an issue for us,” he said. “If we want people to use the most environmentally sustainable form of transport, we should look at the impact of pricing.”
His comments are interesting in the context of recent developments. Last January, under the Government’s formula, regulated fares went up by six per cent, even though by then inflation was tumbling rapidly. And, to pay for new high-speed services that have not yet even started, regulated fares on Southeastern went up by eight per cent.
Many unregulated fares also went up even more, including 11 per cent at CrossCountry – and now the franchise is proposing further increases.
Maybe current developments are just coincidence. But the most significant reductions in passenger growth reported so far this year have been at Southeastern and CrossCountry.
Stephen Joseph, executive director of Campaign for Better Transport, was also worried about the impact of continuing fare increases.
“We are very concerned that, as a result of the recession, train companies are going to be pricing people off trains and back on to roads. The Government needs to take a fresh look at fares regulation,” he said.
And Anthony Smith, chief executive of customer watchdog Passenger Focus, said the rises were way above inflation and were unjustified and unfair. “Despite an economic downturn the seemingly unstoppable rail-price express ploughs on. We cannot simply go on dumping costs on to the passenger in this way.”
While TOCs remain able to increase unregulated fares and charges, the rail minister Lord Adonis has confirmed that regulated fares, including season tickets, will fall next January if the RPI (retail price index) is still negative in July. Regulated train fares are capped at inflation plus one per cent (except at South-eastern), based on RPI in the preceding July. As RPI could fall, according to some economists, to minus two per cent, season tickets could go down by at least one per cent in 2010.
Lord Adonis also seems to be proposing a shake-up in the way passengers are served by TOCs – after spending a week touring the rail network on a £375 rover ticket. His trip, travelling in standard class unaccompanied by civil servants or minders, covered 2,000 miles on 40 trains.
Afterwards he told The Times newspaper he was returning to Whitehall determined to force train operators to correct the many failings he witnessed.
He wants TOCs to comply with new minimum standards for stations, including availability of staff to advise passengers, cleanliness of waiting rooms and toilets, more parking spaces and longer opening hours for cafés and kiosks.
Lord Adonis also said ticket machines needed to be made easier to use, to prevent passengers from overpaying. He noted that his press officer, who had travelled from London to Newcastle to join him at the end of his tour, had paid £103
too much for his standard ticket (£266 instead of £163) because the machine at King’s Cross had given misleading information.
The minister was also dismayed to find no refreshments at 8pm on a Tuesday at Southampton – a station that is used by 5.5 million passengers a year.
He said: “My worst experiences have been on stations, not trains. I was about to board (at Southampton) a two-hour train to Brighton and I couldn’t even buy a cup of tea.”
Birmingham New Street was another bad experience, he added.
“The visit impressed on my mind the tough challenge we will face to bring new high-speed trains into
the centre of Birmingham, if we decide to proceed with a high-speed line from London to the West Midlands,” he wrote in a blog.
“There will be precious little spare capacity even after the rebuilding of New Street, nor at the neighbouring Snow Hill and Moor Street stations.
“Considerable imagination and ingenuity will be required.”
Concerned as he rightly is about improving standards, perhaps Lord Adonis should look again at the proposals for a new Grand Central station in Birmingham, which would solve all the problems, provide a major rail hub and give excellent service to England’s second city and its citizens.
Reader Comments:
Views expressed in submitted comments are that of the author, and not necessarily shared by Railnews.
Think!
The D(a)fT broke up the Virgin Cross Country service with change of trains now being required at Birmingham Nes Street.
It has just been announced that -
A £24.3m grant to help redevelop Newquay Airport has been approved by the European Commission
The Commission has already awarded the airport a 22.5m euro (£19m) EU grant.
'It is hoped the changes will result in passenger numbers rising by 400%, to more than 1.4m a year'
This will no doubt contribute to a reduction in CO2 emmissions
There is of course yet another Aviation funding fiddle called the Route Development Fund
No doubt many if not most other 'local' airports ere benefitting from these funds which will enable these airports to build their traffic by providing direct flights to destinations that once had through Cross Country rail services.
D(a)fT - who is ??
H. T. Harvey, Birmingham, UK
Totally agree with the comments about cross country trains. These are less than comfortable and the saver fares are starting to get so high that only the advanced tickets are affordable for the majority. My experience, particularly at weekends, when there are likely to be delays or detours; is that I would rather not spend too long on one of these trains and don't get value for money.
Not only that these trains are usually very crowded around Birmingham, but this is where the slowest journeys seem to be.
Steve M, Brigg, UK
I'm not at all surprised Cross country trains is one of the biggest losers
where passenger fall off is concerned. With their restrictive off peak afternoon
journies pricing and limited cramped seating on voyagers what do they expect.
leslie burge, leicester, england