Another year, another fare rise

[Dave1987]

Really they are providing different products but giving incentives for people to take their product over competitor's products. If LM applied to run a Birmingham-Euston direct express service then I doubt ORR would approve the application even if there was a path available to do so.

Northern Rail run a Manchester-Stoke stopper but you can't really say they compete with XC and Virgin for passengers travelling between Manchester and Stoke as they offer an inferior product (slower service with commuter style interior) and no incentive to use the inferior product like cheaper tickets. LM and Chiltern offer the cheap fares to get passengers to use their 'economy' service over a competitor's 'premium' service.

As I was coming into New St on Monday I saw a huge Chiltern bill board saying "Are you still a Virgin?", on the board it was proclaiming how Chiltern was just as comfortable as Virgin services for half the price. Virgin and Chiltern not competing..... Come on pull the other one. Chiltern have pumped huge amounts of money into their line as they have a long enough franchise to make the investment worth it. Would the same investment have happened under BR? I doubt it.

 

[pemma]

Virgin and Chiltern not competing..... Come on pull the other one.

A Chiltern service leaves Birmingham Snow Hill at 06:50 and arrives at London Marylebone at 08:29.

A Virgin service leaves Birmingham New Street at 06:50 and arrives at London Euston at 08:14.

The fares are different, the origin and destination are different, the trains are different, the on-board facilities are different so what was wrong with my comment that they offer different products giving incentives for people to take their product over competitor's products?

 

[Dave1987]

A Chiltern service leaves Birmingham Snow Hill at 06:50 and arrives at London Marylebone at 08:29.

A Virgin service leaves Birmingham New Street at 06:50 and arrives at London Euston at 08:14.

The fares are different, the origin and destination are different, the trains are different, the on-board facilities are different so what was wrong with my comment that they offer different products giving incentives for people to take their product over competitor's products?

Exactly they are competing for custom! Virgin offer slightly shorter journey times and chiltern offer high quality for lower price.

 

[pemma]

Exactly they are competing for custom! Virgin offer slightly shorter journey times and chiltern offer high quality for lower price.

But I've never said they aren't competing, even though you seemed to imply that I did!

Virgin and Chiltern not competing..... Come on pull the other one.

In response to a post I started by saying

Really they are providing different products but giving incentives for people to take their product over competitor's products

i.e. they are competing in the same way that Waitrose competes with Tescos but not in the same way that Asda competes with Tescos.

 

[radamfi]

The main point is that Chiltern and Virgin were set up primarily to run trains via Banbury and WCML respectively. It is a coincidence that they happen to offer alternative routes between Birmingham and London, so a certain amount of 'on track' competition can occur.

This would not happen under a management contract system, so arguably that would be a downside to such an arrangement. However, undoubtedly resources are consumed by this competition which could be used for improvements elsewhere.

 

[jon0844]

Relatively few people benefit from competition and even fewer will as we get more mega franchises.

I'd probably trade some of the competitive TOC-specific deals for a more joined up system (ala TfL) that offers better all round value and fairer ticketing.

You might then add on supplements for Intercity services, seat reservations etc, or discounts for taking slower routes (via validators akin to pink Oyster readers).

 

[AndyLandy]

Well, so says BBC news this morning:

http://www.bbc.co.uk/news/business-24449784

The rail industry's power to increase fares in England is to be curbed as part of a government drive to overhaul the rail fare system.

Until now, some regulated fares could potentially have gone up by 9.1% next January.

They will now be capped at 6.1%.

But campaigners say it is not enough, and point out that commuters will still have to pay an above- inflation increase next year.

Regulated fares are those which the government controls, and include season tickets, "anytime" single tickets around major cities, and off-peak inter-city return tickets.

They will go up in 2014 by an average of 4.1%, a number calculated using an average of inflation - as measured by the retail prices index (RPI) for July - plus 1%.

Train companies can add up to 5% on top of the average rise, although fares that go up by more than the average must be balanced by others that rise by less or fall.

The government plans to limit that extra increase to 2% in the future. But the provision for the average regulated ticket price to go up by 1% more than inflation remains.

Of course, one assumes the unregulated fares remain unregulated and the prices on those can vary as much as an operator likes.

 

[Simon11]

This morning a minister will be giving a talk on the future of rail ticketing and informing what changes will happen.

An issue with limiting the price increase on certain flows, is that it will take tocs even longer to sort out fare ananomlies.

 

[Goatboy]

Ah, the self fulfilling prophecy once again.

Rail fares must rise because of inflation!

Inflation goes up partly as a result of rail fare increases being included in the basket of products.

So in a roundabout sort of way, rail fares go up because rail fares went up. Nice. Meanwhile the cost of motoring stays broadly static (Fuel down, my road tax up a tenner and my insurance nice and low this year) ever reducing the appeal of using the train against just getting in the car.

 

[John @ home]

An issue with limiting the price increase on certain flows, is that it will take TOCs even longer to sort out fare anomalies.

TOCs are not interested in removing fare anomalies.

They use the fare system to maximise their income. This creates more and more fare anomalies.

 

[Simon11]

Having worked in a few tocs revenue departments, I have a good idea of how they use this extra leverage.