Determined and motivated rail management key to passenger revenue recovery

Leaving aside the corrosive impact of continued industrial action on passengers’ confidence in the rail industry, the seemingly endless drift in the Government’s implementation of the Williams-Shapps Review is also enormously damaging. It’s clear that there will not be legislation to set up Great British Railways before the election, and increasingly it seems both the Department for Transport and the Treasury know the cost of everything and the value of nothing.

The industry has high fixed costs, and the best chance of improving its financial performance is by growing revenue. However, the focus in recent months has been on cutting costs, with service reductions on many parts of the network and cut-backs on recruitment. 

Chiltern Railways is a clear example of this malaise. The late Adrian Shooter progressively improved services to all the principal stations, reduced journey times through infrastructure upgrades on the Marylebone – Birmingham route, and opened up a new route to Oxford, with the former Bicester Town station redeveloped as Bicester Village, integrated with the eponymous shopping outlet – if you go on the Bicester Village website, the first thing you will see is a train speeding through beautiful countryside. Some of Chiltern’s key services were locomotive hauled trains, with refurbished Mark 3 coaches, almost certainly the most comfortable vehicles on the network. It worked: passenger numbers increased dramatically, and Marylebone station changed from being the quietest terminal in London to a busy, thriving station. 

Before the pandemic, throughout the day there were eight trains an hour from Marylebone on the main route, including two fast trains each to Birmingham and Oxford, with stopping services to Gerrards Cross and High Wycombe providing regular services for smaller stations, so longer distance trains could run fast. However, the level of service on the route has been reduced to five trains an hour, with the Oxford service in particular downgraded, typically making seven intermediate stops, and significantly undercutting the attractiveness of Oxford Parkway as a railhead for journeys to London. Similarly, the secondary route to Aylesbury, although slow, at least had a half hourly service throughout the day; but this now drops to hourly in the middle of the day.

Chiltern also seems to have been particularly badly affected by industrial action – during a recent ASLEF overtime ban, the company ran no services between Aylesbury and Marylebone via Harrow on the Hill; there was a replacement bus service from Aylesbury to Amersham. In contrast, London Northwestern Railway (LNR), the nearest alternative route, operated a full service. 

However, LNR has also shockingly fallen from grace on one route. The Bedford – Bletchley service had been operated by Vivarail diesel units repurposed from old London District Line trains, but Vivarail went into administration in December last year, and the service hasn’t run since then; LNR’s website now states that it’s hoped to start peak hour train services in August, eight months after the service was suspended. It beggars belief that it wasn’t possible to have reached agreement with Vivarail’s administrators to continue using the trains until replacements were found and drivers and conductors trained, or to resource two units to reintroduce the service within a month of its suspension. But no-one involved – neither the operator nor DfT – seems to have had any concern for the passengers, faced with two alternatives –  a limited stop bus which takes 64 minutes against 42 for the train or an all-stations bus taking 85 minutes. Ironically, the route is a section of East-West rail, the government’s flagship scheme to introduce an Oxford – Milton Keynes – Bedford – Cambridge service.

It’s clear that cost savings are now given precedence over customer service, hence revenue, across much of the network. Revenue protection is increasingly hit and miss, and determined fare dodgers can undoubtedly avoid ticket checks on many journeys; I suspect the proportion of ticketless travel is steadily increasing, but it isn’t a prime concern for the operators or for that matter, DfT, as revenues currently go to the Treasury.

Interestingly, the company that has been most effective both at recovering passenger numbers and restoring revenue has been London North Eastern Railway (LNER), despite having been renationalised five years ago, after the failure of the third franchise on the route; all three were blown to pieces by over-optimistic revenue forecasts, a clear case of the “winner’s curse” which has characterised franchise competitions for many years now. LNER has determined, motivated management, and its government-owned holding company has staunchly defended LNER’s right to manage, in short to be allowed to get on with the job. It’s also the case that, uniquely, LNER faces significant open access competition from Hull Trains, Grand Central and more recently Lumo. Yet far from cratering LNER’s revenue, the main impact of competition appears to have been to grow the market, most noticeably between London and Edinburgh, where for the first time for years rail has a higher mode share than air.

There are a few other shards of light within the encircling gloom. The final stage of the Elizabeth Line timetable has been introduced, and the new service has already generated enormously high passenger numbers. These are now included in National Rail figures, exaggerating the genuine recovery in the use of the network.

Also, Northern are now allowing passengers holding advance tickets to change their train for a £2.50 charge up to ten minutes before the departure of the originally booked train. This is an issue which the principal long distance operators desperately need to address; with the majority of their customers now travelling on advance tickets, stations such as Euston and Kings Cross are now full of passengers who have arrived 20 – 30 minutes before they train is booked to depart, because the financial penalties of missing their train are so swingeing. 

In December, the Manchester – London frequency was restored to every twenty minutes, but I suspect most passengers arrive in time to catch the previous service. So, rail has in part surrendered its advantage as a “turn up and go” mode, and end to end journey times are longer than they need be, in the same way as air passengers driving to Heathrow allow extra time because of the risk of motorway delays. Would it be possible to charge a modest premium to travel on one of two successive trains? This would almost certainly be a cheaper and quicker way of reducing journey times than investing £100bn in HS2!

Photo credit: Paul Bigland.

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