Virgin Trains East Coast franchise to end 24 June 2018 and is temporarily re-nationalised

[route:oxford]

No company has to reward anyone. Most places I shop don't do rewards of any kind. Asda certainly don't!

That's not true as Asda most certainly do.

They reward their customer loyalty by paying 1% cashback on items bought with an Asda credit card in their stores.

 

[FQTV]

Doncaster has 66 daily weekday up services, of which four are Grand Central, seven are Hull Trains and 55 are the franchise operator. There's undoubtedly some competitive pressure on pricing, but if you look at the actual fares being charged, it would appear that other factors are at play.

For example, GC and HT services fares are likely to be fairly reflective of the Doncaster to London point-to-point demand at specific times of day, whereas the franchise operator's fares look to be a lot more 'managed'.

The latter generally offers its lower Advance fares on the slower York stoppers, but seems to restrict the lower fare tiers on the fasts, even at the limits of the booking horizons. Having said that, it also often makes lower tiers available on component sectors of its route, presenting split ticket opportunities for those in the know.

York, to a lesser extent in terms of effect from Grand Central, sees a similar thing with fares on the franchisee apparently being restricted. The fast 17:58 to King's Cross tomorrow can't be had for less than £149.50 in First. The slow 18:02, even only 24 hours out, is £64. We can't know how many £149.50 tickets are being sold, of course, but I have on many occasions seen the 17:58 go out very, very lightly loaded, while the 18:02 boards in swarms in the bay across the platform.

Of course, all this from the franchise operator may be reflective of its financial woes; and these methods of revenue management have not delivered the results that they were aiming for.

 

[ModernRailways]

Fingers crossed that this is the case! An agonising 12 month wait has just become even more agonising. It seems like the requirement for more drivers and therefore us as trainees will all depend on whether the ECML will still get the azumas and whether the service expansion will happen.

The ECML will still be getting the Class 800/801 trains, they had nothing to do with Virgin/Stagecoach. Service expansion is also still highly likely, just possibly not as aggressive.

 

[warriorofrovac]

The bit I don't understand...and maybe someone can clarify is that it is oft said that *company* overbid for the franchise. I'm sure I heard this with VTEC and NatEx.

Surely as part of the tendering processes, it would be up to the government to ensure that the bidders are financially sound enough to operate the route and not just awarding it to whoever have the biggest number.

 

[TUC]

I know they were referring to the initial franchises being let quickly, and that DafT are very slow in comparison.

But I mean it, though. If something is let quickly, but the result is failure, has it been let successfully?

But the point is that the 25 franchises were let quickly and had a better success rate than the much slower DfT process.

 

[yorksrob]

For example, GC and HT services fares are likely to be fairly reflective of the Doncaster to London point-to-point demand at specific times of day, whereas the franchise operator's fares look to be a lot more 'managed'.

The latter generally offers its lower Advance fares on the slower York stoppers, but seems to restrict the lower fare tiers on the fasts, even at the limits of the booking horizons. Having said that, it also often makes lower tiers available on component sectors of its route, presenting split ticket opportunities for those in the know.

York, to a lesser extent in terms of effect from Grand Central, sees a similar thing with fares on the franchisee apparently being restricted. The fast 17:58 to King's Cross tomorrow can't be had for less than £149.50 in First. The slow 18:02, even only 24 hours out, is £64. We can't know how many £149.50 tickets are being sold, of course, but I have on many occasions seen the 17:58 go out very, very lightly loaded, while the 18:02 boards in swarms in the bay across the platform.

Of course, all this from the franchise operator may be reflective of its financial woes; and these methods of revenue management have not delivered the results that they were aiming for.

I do feel that yield 'management' can be too 'clever' for its own good.

Passengers will play the game to an extent - by booking early and sticking to particular trains etc to get a good deal, but they do want a certain level of certainty. If it becomes too much of a rigmarole to find a good deal, people will go elsewhere.

 

[TUC]

Doncaster has 66 daily weekday up services, of which four are Grand Central, seven are Hull Trains and 55 are the franchise operator. There's undoubtedly some competitive pressure on pricing, but if you look at the actual fares being charged, it would appear that other factors are at play.

For example, GC and HT services fares are likely to be fairly reflective of the Doncaster to London point-to-point demand at specific times of day, whereas the franchise operator's fares look to be a lot more 'managed'.

The latter generally offers its lower Advance fares on the slower York stoppers, but seems to restrict the lower fare tiers on the fasts, even at the limits of the booking horizons. Having said that, it also often makes lower tiers available on component sectors of its route, presenting split ticket opportunities for those in the know.

York, to a lesser extent in terms of effect from Grand Central, sees a similar thing with fares on the franchisee apparently being restricted. The fast 17:58 to King's Cross tomorrow can't be had for less than £149.50 in First. The slow 18:02, even only 24 hours out, is £64. We can't know how many £149.50 tickets are being sold, of course, but I have on many occasions seen the 17:58 go out very, very lightly loaded, while the 18:02 boards in swarms in the bay across the platform.

Of course, all this from the franchise operator may be reflective of its financial woes; and these methods of revenue management have not delivered the results that they were aiming for.

Why are you only quoting 1st class fares? Thry give a misleading picture compared to the much lower standard class fares.

 

[LNW-GW Joint]

But the point is that the 25 franchises were let quickly and had a better success rate than the much slower DfT process.

Those franchises were very loosely specified, and left the TOCs with a lot of freedom.
The political imperative was to franchise the lot before the 1997 election.
Some then indeed went haywire (Connex, MTL, FNW).
So DfT/SRA decided to micromanage the next round of franchises to keep the TOCs in line, which makes for lots of small print and lawyer time.
4 early franchises were 15-year ones (WC, XC, LTS, SE) so they did not come round for renewal as quickly.
We've also got into the habit of missing refranchising timescales and having to let short-term direct awards - VT has had 4 since 2012.
Franchise theory also says there should be more, smaller franchises to decrease the bidder risk and attract new bidders.
The only subsequent longer franchise was Chiltern, which has arguably been the most successful (though it had a period of unprofitability).
The Treasury doesn't like long franchises by the way, in case it locks in a TOC which is extracting too much profit.

 

[WatcherZero]

Chiltern one has been a bit different though, the TOC has been able to make significant self funded infrastructure investments (the 3 Evergreen projects) in return for the government granting franchise extensions. It is more of a concession than a franchise model. Evergreen 3 for example was £250m infrastructure improvement entirely self funded and awarded by the Toc to Bam Nuttal with NR only having a rubber stamping role.

 

[Raul_Duke]

What are these "multitude of factors" exactly. You mean too many private firms with too many fingers in the taxpayers pie, an overly nostalgic dream world where we still dwell on the greats like Brunel and Stephenson whose designs are now almost 2 centuries old, God knows how many consultants creaming of millions whilst putting the square root of sod all back. Nonsense. Of course it could be done.

Ok, if you say so.

 

[joncombe]

The removal of East Coast Rewards did have an impact on my travel but it ONLY did so significantly when other areas deteriorated. In 2015 and 2016 I was a regular traveller despite not having East Coast Rewards but was still reasonably happy as I got a decent on-board product and enjoyed travelling by train a lot more than I did flying.

It's very similar for me. I travel between the south east and Scotland regularly. I used to always travel by train. Tickets on East Coast were generally similay to air fares, but it is a more pleasant way to travel on the train.

However when VTEC abolished rewards and jacked up the advance fares (which they certainly did on the London to Edinburgh/Aberdeen route) I couldn't justify paying more, often substationally so, to travel by train rather than air. It takes me a similar amount of time and money for me to get from home to Kings Cross as it does to get to Heathrow or Gatwick and only slightly longer to get to City airport . It's about an hour flight to Edinburgh. Even if you get to the airport 2 hours earlier (as recommended, but I rarely do) and including the time taken to travel from the airport in Edinburgh to the city centre it is almost always quicker than the train. It's always so if going further north for example to Aberdeen or Inverness. Realistically, you're not going to turn up at the station 2 minutes before depature, either. There is no customs or passport check on domestic flights of course and I travel hand luggage only so no waiting for baggage.

I find that by the time train fares open for bookings (3 months) cheaper prices are generally available with BA, and especially so with Easyjet. Also factor in the decline in service - I've never known a flight take off with no food or drink available, but I've increasingly found VTEC operating trains with no buffet or trolley due to "staff shortage" and it's hard to justify using the train. Not helped by the fact the last time I travlled on VTEC the train was 5 and a half hours late and they didn't provide any food or drink during that time (because the buffet was closed due to staff shortage, and I was stuck on the train until gone midnight). When I complained about this I just got fobbed off with some excuse about "health and safety" where they claimed it wouldn't be safe to provide food or drink because the train was overcrowded and it was too dangerous for people to walk through with hot drinks. When I question why they couldnt therefore provide cold drinks or food I was told that was their "final" response and to take it up with Transport Focus if I was not happy. Again if you're delayed on a flight for 5 and a half hours they are required to provide food and drink. Not so VTEC, it seems.

I do still use VTEC on the Leeds route but for anything else it's either fly or use Grand Central.

Then there are other more minor issues like their new website which seems to be worse in every way. Also had services disrupted by strikes on other operators (e.g. Northern) where Virgin have refused to allow any changes to the ticket even though the services specified on the ticket aren't running.

 

[Starmill]

Doncaster has 66 daily weekday up services, of which four are Grand Central, seven are Hull Trains and 55 are the franchise operator. There's undoubtedly some competitive pressure on pricing, but if you look at the actual fares being charged, it would appear that other factors are at play.

For example, GC and HT services fares are likely to be fairly reflective of the Doncaster to London point-to-point demand at specific times of day, whereas the franchise operator's fares look to be a lot more 'managed'.
The latter generally offers its lower Advance fares on the slower York stoppers, but seems to restrict the lower fare tiers on the fasts, even at the limits of the booking horizons. Having said that, it also often makes lower tiers available on component sectors of its route, presenting split ticket opportunities for those in the know.

What an eloquent, accurate and concise summary. I was thinking about how to say this myself but you have done it for me.

There is undoubtedly an effect on Doncaster to London caused by Hull Trains and Grand Central, but that's also probably true of National Express. It's not really having much impact. It's also remarkably difficult to secure the cheaper tiers of Hull Trains Advance.

 

[Starmill]

Why are you only quoting 1st class fares? Thry give a misleading picture compared to the much lower standard class fares.

What do you mean? Standard class fares are not always much lower. They did quote Standard class fares, but the train in question doesn't have any available. Of course, a York to London Super Off-Peak Single is £109, and that is lower than £149.50 which perhaps they could have made slightly clearer.

 

[DimTim]

You're describing the concession model, and I think that's a possible option. TfL basically control everything about London Buses - they set the routes, the frequencies, the fares (which they receive in full), the type of bus. The operator is paid to run the service, provides the staff and the buses and that's it. It works well because the same organisation is in charge of the roads and the buses. If they want to improve a route, they have the powers to put in a bus lane as well as buy more buses - whatever suits.

The same system is used for the Overground, Merseyrail and possibly the DLR too. The question for the railways would be - who acts as the TfL-equivalent body? You could have a national body (we could call it 'Intercity') to run the main lines, and then devolve the 'regional railways' to local (or probably larger regional) authorities, like Transport for the North. Given the level of micro-management involved in the latest franchises, I'd say we're half way there already. What really needs to happen is to streamline the whole operation. The fact that anything at all gets done with the current system in place is almost a miracle in itself.

The impression I get is that the concession model appears to be working with TFL Merseyside etc. Would it not be an opportunity to try this model on the East Coast?

 

[pethadine82]

why cant it go back to being East Coast. They had low fares and good staff morale. Did they actually make a profit?

 

[Marklund]

The impression I get is that the concession model appears to be working with TFL Merseyside etc. Would it not be an opportunity to try this model on the East Coast?

Merseyrail is pretty much a confined network. East Coast isn't.

 

[DimTim]

Merseyrail is pretty much a confined network. East Coast isn't.

Doesn’t everything eminate from Kings Cross? - so a closed area

I appeciate other operators run on their tracks but TFL has this issue.

 

[Danfilm007]

The impression I get is that the concession model appears to be working with TFL Merseyside etc. Would it not be an opportunity to try this model on the East Coast?

I understand the idea of it, but I suppose they are (very mostly) self contained networks with little interworkings with other bits of network, rather than a very long route intertwined with others.

 

[Marklund]

Doesn’t everything eminate from Kings Cross? - so a closed area

Not in the same vein at all.

I appeciate other operators run on their tracks but TFL has this issue.

Nothing like the same extent.

 

[TUC]

What do you mean? Standard class fares are not always much lower. They did quote Standard class fares, but the train in question doesn't have any available. Of course, a York to London Super Off-Peak Single is £109, and that is lower than £149.50 which perhaps they could have made slightly clearer.

Looking at Doncaster-London services after 0900 tomorrow (Not weeks away), the fares are 0918 (VTEC) £103.50, 0925 (Hull Trains) £58.00, 0930 (Grand Central) £30.00. Guess what the fare would be if there were no competition?

 

[Starmill]

Looking at Doncaster-London services after 0900 tomorrow (Not weeks away), the fares are 0918 (VTEC) £103.50, 0925 (Hull Trains) £58.00, 0930 (Grand Central) £30.00. Guess what the fare would be if there were no competition?

£103.50, no doubt.

What is your point?

 

[TUC]

£103.50, no doubt.

What is your point?

My point is thst passengers would significantly lose by the lack of competition.

 

[Starmill]

And you demonstrate that how?

 

[TUC]

And you demonstrate that how?

Look at the difference in fares I've just quoted.

 

[SamYeager]

The impression I get is that the concession model appears to be working with TFL Merseyside etc. Would it not be an opportunity to try this model on the East Coast?

Correct me if I'm wrong but I rather think the concession model means the government doesn't get to receive several million quid or does it mean something like DOR?

 

[Chrism20]

Looking at Doncaster-London services after 0900 tomorrow (Not weeks away), the fares are 0918 (VTEC) £103.50, 0925 (Hull Trains) £58.00, 0930 (Grand Central) £30.00. Guess what the fare would be if there were no competition?

The Hull service tomorrow is cancelled and the cheapest VTEC ticket is £98.50 whilst the GC fare is advanced and tied to a specific train.

 

[matt_world2004]

The impression I get is that the concession model appears to be working with TFL Merseyside etc. Would it not be an opportunity to try this model on the East Coast?

The concession model doesnt work with southern however or between first group and heathrow connect.

 

[SaveECRewards]

(...) How about the fact that Doncaster-London fares are much lower than comparable West Coast journeys? Doesn't the fact there are three competing operators for that route have more than a little to do with it?

East Coast has always been significantly cheaper than West Coast for as long as I remember. I remember being shocked in 1999 when I saw the cost of a ticket from Euston to Manchester and thought how much dearer it was compared to GNER which I was used to.

 

[SaveECRewards]

Weren't Savers the original Advance fares in that, if I remember rightly, they were originally lower fare tickets tied to a fixed train?

Savers are what are now called off-peak returns, that's why their code is SVR. Supersavers were like super-off peak but worse as they weren't valid on a Friday.

 

[dcsprior]

I used to be a good customer of East Coast's, but was lost by VTEC's price increases and scrapping of rewards (which was effectively an additional price increase). In fact I just realised that the format I used to use for my record of travel costs makes it easy for me to pull out some stats:

From 14/01/2013 until 08/09/2015, I made 196 single journeys between Edinburgh-London and vice versa. The southbound ones were on on the 05:40 service (typically the dearest of the day), normally on Tuesdays and the northbound ones were normally on the 17:00 on Thursdays - but occasionally the 16:30, 17:30 or 18:00. 130 of these (24 rewards + 106 cash) were in first class and 66 (9 rewards + 57 cash) were in standard Class - so an approximate 2:1 split of 1st : std. My total spend in this time was £10,050.04 which was £102.55 per return journey - and this is inflated by things like occasional last-minute changes.

Looking today, for the furthest away week which is bookable (Tue 17 - Thu 19 July), I'd be paying £133.50 in standard or £212.50 in 1st. Using the same first/standard split as I did above gives a like for like cost of £185.90, an increase of over 80%. Although 1 week isn't much of a sample size, any time I've checked recently I've seen similar costs....

....and this is why I'm now one of EasyJet's best customers, and why I'll not be sad to see VTEC go.