Leaving aside who wins and who loses from a change in the fares structure, revenue neutral or otherwise, the issue is that there are strong incentives and few restrictions on TOCs seeking to increase revenue. Public policy is little guide, other than politicians grandstanding, and operators wanting to smooth the profile have to work hard to persuade their DfT masters to allow changes to the restrictions.
Underneath all that, though, is that the regulated fares have risen massively as compound rises have bitten, but operators have found themselves selling more and more tickets at significant discounts to get people to travel. That goes beyond just marginal pricing issues, and cuts to the heart of an understanding of what the market will bear on rail.
That, in turn, raises big questions about the cost of the railways given the level of subsidy in the system and the low margins earned by TOCs.
Underneath all that, though, is that the regulated fares have risen massively as compound rises have bitten, but operators have found themselves selling more and more tickets at significant discounts to get people to travel. That goes beyond just marginal pricing issues, and cuts to the heart of an understanding of what the market will bear on rail.
That, in turn, raises big questions about the cost of the railways given the level of subsidy in the system and the low margins earned by TOCs.
