Passenger numbers vs revenue

[Craig1122]

Some interesting figures quoted here given there's been discussion and speculation on various other threads:

Rail travel recovering from the pandemic, but season ticket sales still weak

Rail travel continues to recover from the pandemic, but season ticket sales are still far below their pre-pandemic levels, according to figures from the Office of Rail and Road (ORR).

www.ianvisits.co.uk

Rail travel continues to recover from the pandemic, but season ticket sales are still far below their pre-pandemic levels, according to figures from the Office of Rail and Road (ORR).

Just under a billion rail journeys were made between April 2021 and March 2022, compared to just 388 million in the previous year, at the height of the lockdown. However, it’s still just 57% of the number of journeys made on the railways before the pandemic....

For the last full financial year passenger numbers were at 57% and revenue has pretty much tracked it at 54%. Even given there's been a fares rise this undermines the suggestion from many people here that revenue would be much lower due to more people travelling for leisure and fewer people buying seasons.

Bear in mind these figures are for the full financial year and are currently trending a good bit higher. As I've commented before even figures over 50% are better than at the end of the nineties, so any suggestions of widespread closures should be very far from the mark in any sensible world.

 

[yorkie]

Yep this matches what has been posted on here.

The biggest problem is that revenues are down by a greater degree than passenger numbers as there has been a shift away from the more lucrative types of travel.

 

[43066]

Overall an improving picture which is good to see.

The biggest problem is that revenues are down by a greater degree than passenger numbers as there has been a shift away from the more lucrative types of travel.

Indeed. Although the point has also been made that the loss of season tickets has been compensated for by people buying anytime tickets for the days when they are needing to travel by train for work, making leisure trips etc. Travelling on anytime tickets twice per week will result in a *lot* more revenue per journey than if an annual season ticket were used to make the same journey five times per week, if that makes sense.

 

[Dr Day]

More relevant data are absolute revenue and absolute operating costs, and I for one appreciate those within the industry with access posting it to provide much more context to some of the current threads.

It is recognised that some subsidy is needed across the network as a whole but questions now arise over how it should be distributed given an awful lot more of the network is in deficit. Busy trains don’t necessarily translate into profitable routes, as data provided on the now-closed Cross Country thread highlighted.

 

[alistairlees]

Yep this matches what has been posted on here.

The biggest problem is that revenues are down by a greater degree than passenger numbers as there has been a shift away from the more lucrative types of travel.

They are not that different actually.

 

[yorksrob]

More relevant data are absolute revenue and absolute operating costs, and I for one appreciate those within the industry with access posting it to provide much more context to some of the current threads.

It is recognised that some subsidy is needed across the network as a whole but questions now arise over how it should be distributed given an awful lot more of the network is in deficit. Busy trains don’t necessarily translate into profitable routes, as data provided on the now-closed Cross Country thread highlighted.

Clearly since leisure traffic is recovering most at the moment, there should be a strong emphasis on maintaining the passenger network to its current extent.

 

[Watershed]

Some interesting figures quoted here given there's been discussion and speculation on various other threads:

Rail travel recovering from the pandemic, but season ticket sales still weak

Rail travel continues to recover from the pandemic, but season ticket sales are still far below their pre-pandemic levels, according to figures from the Office of Rail and Road (ORR).

www.ianvisits.co.uk

For the last full financial year passenger numbers were at 57% and revenue has pretty much tracked it at 54%. Even given there's been a fares rise this undermines the suggestion from many people here that revenue would be much lower due to more people travelling for leisure and fewer people buying seasons.

Bear in mind these figures are for the full financial year and are currently trending a good bit higher. As I've commented before even figures over 50% are better than at the end of the nineties, so any suggestions of widespread closures should be very far from the mark in any sensible world.

These figures aren't massively helpful given they are for a year where there were still many restrictions in place, and hence reduced levels of demand. The DfT transport use statistics, which are updated daily, are much more useful. A graph of National Rail demand vs time shows a clear upward trend, with demonstrably higher demand on Fridays-Mondays than Wednesday or Thursdays, averaging around 83% of pre-Covid levels since April/May this year:



Of course this is a snapshot of the entire industry and some TOCs which have fared far worse than others - here the ORR data is more useful, showing the relative recovery by TOC.



Broadly speaking, I would imagine these trends will remain similar, even as passenger numbers get closer to 100%.

As others have said, revenue remains on average a few percentage points behind passenger numbers, which, given there have been 2 fare increases, means that it is something like 25-30% behind where it might have been if not for Covid.

 

[Nicholas Lewis]

The ORR report is entitled Q4 results but then goes on to review the previous 12mths. You have to go into the data tables to get an insight of what has happened in Q4 and in comparing it to Q4/19 reveals some interesting stats over ridership. So despite Omicron restrictions in January imploring working from home the ridership data amongst operators didn't change that much over Q3. LNER continue to be operator leader at 91% of Q4/19 with EMR following behind on 82% ScotRail remain bottom at 54% and it seems bizarre given there operation they remain so low.

They don't give specific operator fare income but only split it out by ticket type. This shows that season ticket income was only 30% of 2019 or a nett £380m below Q4/19. Advanced and off peak tickets are at 70% of Q4/19 income. (not sure if the datasets are adjusted for inflation). The run rate on ticket revenue vs Q4/19 would amount to 4.8B pa but there has been further improvement in Q1/22 based of DfT weekly usage dataset so that deficit would be below 4B. For comparison the 19/20 franchise deficit had grown to 1.2B so this implies that the industry deficit that needs financing without any change to operational costs would amount an additional £3B on the taxpayer However, we know operators have got rid of stock, cut RDW and no doubt a host of other things so sub £3B seems possible. Yes this is a serious amount of money but in the grander scheme of govt borrowing it is fundable and it should be going hand in hand to to right size the capacity offering as the new picture emerges.

My personal assessment of travelling around is there plenty of people out there prepared to pay to travel even off peak fares aren't that cheap. There are also plenty of routes where trains aren't that well loaded but they weren't before Covid either. Particularly in L&SE get off the main lines and the branches were lightly loaded during teh day and more than likely now are probably driving more off peak revenue than they used to.

My other litmus tests is how many people are parked along the road on the way down to my local station (its used to be free but now its 8.60/day and guess what nobody parks there now) and over the last month its c60% of what it used to be pre covid with Tues to Thurs being highest use. OK its seems high peak hour travel is now consigned to history books and as that period was very resource intensive and difficult to deliver reliably the industry ought to be able to benefit from that in the long run by right sizing the resources but it takes time.

Personally i believe DfT was wrong to internalise all the franchises because of Covid they should have just provided temporary revenue support . The DfT aren't best placed to manage the consequences and now they are firefighting the deficit between operational costs and revenue income whereas the TOCs would have managed that dynamic better and for lower cost. Sadly this govt can never admit it might be wrong so my take is its going to take 3-4 years to get out the rut the industry is rapidly falling into. It won't stop the railway delivering day in day out (when its not on strike) just things certainly won't get better anytime soon.

 

[miklcct]

These figures aren't massively helpful given they are for a year where there were still many restrictions in place, and hence reduced levels of demand. The DfT transport use statistics, which are updated daily, are much more useful. A graph of National Rail demand vs time shows a clear upward trend, with demonstrably higher demand on Fridays-Mondays than Wednesday or Thursdays, averaging around 83% of pre-Covid levels since April/May this year:

View attachment 116348

Of course this is a snapshot of the entire industry and some TOCs which have fared far worse than others - here the ORR data is more useful, showing the relative recovery by TOC.

View attachment 116349

Broadly speaking, I would imagine these trends will remain similar, even as passenger numbers get closer to 100%.

As others have said, revenue remains on average a few percentage points behind passenger numbers, which, given there have been 2 fare increases, means that it is something like 25-30% behind where it might have been if not for Covid.

It seems that long distance TOCs are the best recovered, followed by local TOCs. Why does regional travel lag behind both long-distance and local travel?

 

[Nicholas Lewis]

It seems that long distance TOCs are the best recovered, followed by local TOCs. Why does regional travel lag behind both long-distance and local travel?

Perhaps the lack of revenue control during covid periods means they haven't got accurate data on regional travel. L&SE operators are heavily gated and have machines and majority of stations unless your well out in rural areas.

 

[Xavi]

As forecast in Dec-21

Back to the bad old days’: swingeing rail cuts set alarm bells ringing

What, not ever? Let's come back in 5 years' time and see what's happened. Perhaps we should mothball Crossrail, or heck, just fill the tunnels with concrete. They're never going to be used and it will just cost money to keep them open. It does feel like there’s an agenda of some on this (and...

www.railforums.co.uk

 

[johntea]

Overall an improving picture which is good to see.



Indeed. Although the point has also been made that the loss of season tickets has been compensated for by people buying anytime tickets for the days when they are needing to travel by train for work, making leisure trips etc. Travelling on anytime tickets twice per week will result in a *lot* more revenue per journey than if an annual season ticket were used to make the same journey five times per week, if that makes sense.

Even when I need to go into the office they're pretty flexible with me so I travel during off peak hours usually to save a few quid!

Although I'm lucky to work in IT so really don't need to be in that often at all, most of my work involves servers which are either typically virtual or have a remote management network port these days so you can essentially be 'sat in front of them' from Australia if you really wanted!

My previous season ticket was rather useful though as it was a West Yorkshire (+Harrogate) 'MCard' so I had unlimited use of rail around West Yorkshire on top which was useful for leisure at the weekend, and you could obviously save a few quid on further trips afield as you only had to start paying at the edge of the West Yorkshire boundary!

 

[AlastairFraser]

Perhaps, if peak season ticket revenue is down, the DfT need to start cutting expensive to provide and underutilised peak extra, especially in the South East and shift the limited train crew/ driver resources to weekend and off peak service.

 

[dk1]

Perhaps, if peak season ticket revenue is down, the DfT need to start cutting expensive to provide and underutilised peak extra, especially in the South East and shift the limited train crew/ driver resources to weekend and off peak service.

You cannot just move drivers rest days. Anything like that is a very long & drawn out procedure that will probably get rejected.

 

[AlastairFraser]

You cannot just move drivers rest days. Anything like that is a very long & drawn out procedure that will probably get rejected.

You could shift them to later shifts based on the afternoons and evenings though, and recruit from now on weekend-inclusive contracts. I can appreciate many drivers don't want to be working weekends for family reasons, that's fine, but the future of the railways does not lie in chucking resources at peak extras.

 

[dk1]

You could shift them to later shifts based on the afternoons and evenings though, and recruit from now on weekend-inclusive contracts. I can appreciate many drivers don't want to be working weekends for family reasons, that's fine, but the future of the railways does not lie in chucking resources at peak extras.

We’ve done this to death on here. You cannot just change the roster. Why would you want to move them to afternoons & evenings? If I was on an early shift week it’s not going to happen.

 

[RPI]

The gap would be even smaller if Revenue Protection was even loosely enforced with some TOC's

 

[PeterC]

We’ve done this to death on here. You cannot just change the roster. Why would you want to move them to afternoons & evenings? If I was on an early shift week it’s not going to happen.

Everything on the railways seems to be set in stone. If other industries took this view supermarkets would be opening for five and a half days a week and closing for the night ar 5:30

If the market changes you change with it or go under.

 

[Need2]

If other industries took this view supermarkets would be opening for five and a half days a week and closing for the night ar 5:30

And how less stressed everyone seemed.

== Doublepost prevention - post automatically merged: 18 Jun 2022 ==

Everything on the railways seems to be set in stone.

To a certain degree yes but you can’t just go and change workers times and rest days because you feel like it.

 

[Mikey C]

Even when I need to go into the office they're pretty flexible with me so I travel during off peak hours usually to save a few quid!

Indeed, it's a major cultural shift that will have massive long term implications for the rail industry. Especially for longer distance "professional" commuters, far more likely to be doing the sorts of jobs which aren't ones where you have to be at your desk by 9am. Why spend £4000 on a season ticket, when you can come in 3 days a week, and not even need to be there by 9am.

To a certain degree yes but you can’t just go and change workers times and rest days because you feel like it.

But longer term, the hours will have to change to reflect travel patterns. It's unsustainable having vast numbers of rail workers all employed to serve the morning rush hour, if far fewer passengers are now travelling then (especially on Monday and Friday). Similarly, the poorer Sunday service (late starts, reduced frequency, engineering works) makes little sense if that's when leisure passengers want to travel.

 

[ChrisC]

Indeed, it's a major cultural shift that will have massive long term implications for the rail industry. Especially for longer distance "professional" commuters, far more likely to be doing the sorts of jobs which aren't ones where you have to be at your desk by 9am. Why spend £4000 on a season ticket, when you can come in 3 days a week, and not even need to be there by 9am.


But longer term, the hours will have to change to reflect travel patterns. It's unsustainable having vast numbers of rail workers all employed to serve the morning rush hour, if far fewer passengers are now travelling then (especially on Monday and Friday). Similarly, the poorer Sunday service (late starts, reduced frequency, engineering works) makes little sense if that's when leisure passengers want to travel.

In the longer term isn’t this more than just a change in the time of day and days of the week when people are travelling. Lots of the increased leisure travel is not on the traditional South East commuter lines into London but more widespread throughout the country.

Two carriage trains running between major cities in the Midlands and the North are proving to be totally inadequate at weekends with passengers being left behind. There have been numerous threads discussing overcrowding on the North Wales Coast, the West Country and on Cross Country Trains to mention a few.

Just as staff can’t suddenly be moved to different working times trains can’t suddenly be moved to different lines and different parts of the country. The electric trains than run on most of the commuter routes into London can’t operate elsewhere. However, if the changes in travel patterns we are seeing are long term, future planning for the railway nationally needs to look at this long term. For example there’s no long term point in running 12 carriage lightly loaded trains at 7am on a Tuesday morning into London for ever, when on a Saturday morning dozens of passengers are being left behind in places like Sheffield because of short formed trains.

 

[Craig1122]

The ORR report is entitled Q4 results but then goes on to review the previous 12mths. You have to go into the data tables to get an insight of what has happened in Q4 and in comparing it to Q4/19 reveals some interesting stats over ridership. So despite Omicron restrictions in January imploring working from home the ridership data amongst operators didn't change that much over Q3. LNER continue to be operator leader at 91% of Q4/19 with EMR following behind on 82% ScotRail remain bottom at 54% and it seems bizarre given there operation they remain so low.

They don't give specific operator fare income but only split it out by ticket type. This shows that season ticket income was only 30% of 2019 or a nett £380m below Q4/19. Advanced and off peak tickets are at 70% of Q4/19 income. (not sure if the datasets are adjusted for inflation). The run rate on ticket revenue vs Q4/19 would amount to 4.8B pa but there has been further improvement in Q1/22 based of DfT weekly usage dataset so that deficit would be below 4B. For comparison the 19/20 franchise deficit had grown to 1.2B so this implies that the industry deficit that needs financing without any change to operational costs would amount an additional £3B on the taxpayer However, we know operators have got rid of stock, cut RDW and no doubt a host of other things so sub £3B seems possible. Yes this is a serious amount of money but in the grander scheme of govt borrowing it is fundable and it should be going hand in hand to to right size the capacity offering as the new picture emerges.

My personal assessment of travelling around is there plenty of people out there prepared to pay to travel even off peak fares aren't that cheap. There are also plenty of routes where trains aren't that well loaded but they weren't before Covid either. Particularly in L&SE get off the main lines and the branches were lightly loaded during teh day and more than likely now are probably driving more off peak revenue than they used to.

My other litmus tests is how many people are parked along the road on the way down to my local station (its used to be free but now its 8.60/day and guess what nobody parks there now) and over the last month its c60% of what it used to be pre covid with Tues to Thurs being highest use. OK its seems high peak hour travel is now consigned to history books and as that period was very resource intensive and difficult to deliver reliably the industry ought to be able to benefit from that in the long run by right sizing the resources but it takes time.

Personally i believe DfT was wrong to internalise all the franchises because of Covid they should have just provided temporary revenue support . The DfT aren't best placed to manage the consequences and now they are firefighting the deficit between operational costs and revenue income whereas the TOCs would have managed that dynamic better and for lower cost. Sadly this govt can never admit it might be wrong so my take is its going to take 3-4 years to get out the rut the industry is rapidly falling into. It won't stop the railway delivering day in day out (when its not on strike) just things certainly won't get better anytime soon.

Thanks for the deeper analysis, I haven't had time to look beyond the headline figures yet. I reckon you're pretty spot on with your commentary as well. Wish everyone here put as much thought into their posts!

Overall matches my opinion that the situation isn't great but also isn't as bad as some make out. But whether that can be rectified without deep cuts depends on structural and political issues which are currently out of the hands of the operators. I think it can be achieved but I'm not optimistic it will be...

 

[aavm]

Reading the above, income is currently around 83% of pre-covid, that's 17% down. Add inflation for fuel/'leccy.

The employees are looking for a 7% pay rise. [corrected, source Daily Mail]

Who is going to pay?

 

[class 9]

Employees aren't looking for 10%.

 

[bramling]

You could shift them to later shifts based on the afternoons and evenings though, and recruit from now on weekend-inclusive contracts. I can appreciate many drivers don't want to be working weekends for family reasons, that's fine, but the future of the railways does not lie in chucking resources at peak extras.

One can change that to many *people* don’t want to be working weekends for family reasons.

And this is the problem, even if it were practicable to replace 100% of railway staff overnight, I suspect there would still be problems with weekend rostering and coverage.

The way to provide weekend capacity is in many places to run longer trains, but where do these longer trains come from? In many cases it is using trains which were justified on the basis of peak times (commuter operators especially south-east), or they simply don’t exist (regional operators). It’s actually rather easier to strengthen or provide a few with-flow peak services than it is to cater for weekend traffic, which is heavily erratic due to factors like events, weather, Christmas shopping rush, etc etc. And then there’s the economic question of how viable this is when many people will be travelling on cheaper tickets - for example a typical family will be taking up four seats, yet two will be travelling on child tickets.

 

[yorksrob]

One can change that to many *people* don’t want to be working weekends for family reasons.

And this is the problem, even if it were practicable to replace 100% of railway staff overnight, I suspect there would still be problems with weekend rostering and coverage.

The way to provide weekend capacity is in many places to run longer trains, but where do these longer trains come from? In many cases it is using trains which were justified on the basis of peak times (commuter operators especially south-east), or they simply don’t exist (regional operators). It’s actually rather easier to strengthen or provide a few with-flow peak services than it is to cater for weekend traffic, which is heavily erratic due to factors like events, weather, Christmas shopping rush, etc etc. And then there’s the economic question of how viable this is when many people will be travelling on cheaper tickets - for example a typical family will be taking up four seats, yet two will be travelling on child tickets.

The easiest way to run longer trains would be to not keep scrapping fleets when there isn't the stock to replace it.

 

[py_megapixel]

You cannot just change the roster.

So the railway is forever just going to run extra capacity to ease weekday peak crowds which have hugely shrunk , while weekend and evening trains become overcrowded, because the staffing arrangements are inflexible?

 

[bramling]

The easiest way to run longer trains would be to not keep scrapping fleets when there isn't the stock to replace it.

Not disagreeing, it doesn’t help when politics interferes, in various ways.

The current setup just isn’t serving the end-user well. We made a small journey yesterday using TfW. The outward journey went fine to be fair, but arriving at Swansea in the early evening, two consecutive services were cancelled (variously attributed to overcrowding and train faults), the third was 45 late and turned up wedged. So we ended up waiting for a Heart of Wales service which was 2x153. Two hours to do a journey of a few minutes. It was mildly amusing to get the “retro” experience of 153s, knowing that for all the spiel about the modern railway, it would have been the self-same stock on this journey nearly 30 years ago!

 

[Watershed]

It was mildly amusing to get the “retro” experience of 153s, knowing that for all the spiel about the modern railway, it would have been the self-same stock on this journey nearly 30 years ago!

And in the case of the Heart of Wales line, there's every chance you will still be making the journey on the self-same stock in 30 years' time...!

 

[dk1]

So the railway is forever just going to run extra capacity to ease weekday peak crowds which have hugely shrunk , while weekend and evening trains become overcrowded, because the staffing arrangements are inflexible?

It may change eventually to an extent but lots of negotiations until then. It's a complex process.