Basically trains are expensive to buy, but cheap to run.
It can be surprisingly difficult to find worthwhile savings. For the groups of services for which I undertake this sort of evaluation, it is very easy to end up reducing revenue by more than the saving in cost. This is because many people respond to poorer, less frequent services by travelling less often. The obvious illustration of this is the reduction of demand during planned closures. If there is engineering works this weekend, you'll tend not to go on a leisure trip. If there is a strike this week, you will work at home an extra day. Yes, not everyone is 'elastic' - that is to say able to change their plans but all other things being equal
some people will be put off. Over the year, many of these lost passengers will make fewer trips and the railway will take less revenue.
It isn't that easy to make cost savings and not simply end up even worse off. The direct variable costs of operation are low. Most of the overall cost is 'fixed' and hard to change at least in the short or medium term. The fuel / power cost is clearly saved and drivers leave all the time, so staff turnover will allow the driver cost to be saved. But reduce your fleet kms by 3% and you might save the cost of a few casualty repairs, but it will often not be possible to find 3% savings from a small fleet maintenance team, or track maintenance team. The services I plan have a variable cost per kilometre that is similar to a taxi fare; a handful of people on board, and the direct costs are covered, though it is notable how poorly this is understood by even senior industry figures or government. Having said that, the way track costs are charged in the UK National Rail network, probably makes it easier for the TOC to avoid access charges, even if Network Rail's costs are harder to save.
To make greater savings you have to start reducing your more fixed costs, such as fleet. You can sell a midlife bus fairly straightforwardly to a smaller company replacing life expired buses, but the second hand market for fairly route specific UK trains is problematic - which is why old go anywhere DMUs swiftly move to a new operator, but premature scrapping (yielding only a tiny fraction of the initial investment) awaits many of the surplus electric trains.
In the current climate, the railway ends up in a tricky position, where the higher ups, under pressure from political masters demand train planners find savings, only to find those same masters aghast at the extent of the cuts necessary to save meaningful amounts of the required subsidy and the likely impact of those cuts on their constituents and popularity! Or it simply isn't possible to save the cash demanded, without loosing an even larger sum in revenue.
It is much easier to save money by not investing or renewing infrastructure (which in the UK is weirdly considered investment rather than being a cost of operation), which is why British Rail did so little...
This isn't correct. Passenger numbers respond directly to frequency, whether they perceive it as 'waiting time' for a turn up and go service like a metro or 'opportunity to arrive at the desired time' as they would with say an hourly or less frequent timetabled service. You are far more likely to want to do a four hour journey that arrives at a reasonable time for your appointment, than have to get there half a day earlier because there are only a few trains each day. You may have to do it from time to time, some passengers are 'inelastic', but most will travel less often if you reduce the frequency.
Other factors clearly do influence passenger numbers, but compare one line in London that has an upgrade and an increase in frequency, while another that stays the same and the former will grow more than the latter, even if they are both growing because of population change or the state of the economy. Compare the off peak growth of traffic on many TfL controlled routes which have significantly improved frequency, with some NR routes that have the same or worse off peak frequency they did in the 1990s and this effect is clearly illustrated.
The relationship between frequency and traffic growth is well understood and is a fundamental component of the DfT's Transport Appraisal Guidance (WebTAG) and the industry's Passenger Demand Forecasting Handbook (PDFH) as well as TfL's Business Case Development Manual (here:
https://tfl.gov.uk/corporate/transp.../foi-request-detail?referenceId=FOI-4306-1718)...