What effect will a change in franchise ownership have on rail fares ?

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General Zod

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The general consensus of opinion is that after the bidding process is complete there is a strong possibility of VT losing the WCML franchise and perhaps being given the ECML by way of compensation. Broadly speaking what changes in fares can we expect after the franchises have been handed over to the successful TOC ? Will the new owners completely re-structure the ticket pricing policy of the line they inherit and what will be the consequences for the fare paying public ? Can we expect higher Advance fares on the WCML/ ECML when the new terms of ownership begin ? Or is there a provisio in the small print which states that the new TOC has not to deviate from similar pricing stratagems ?
 
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Lampshade

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Depends who gets it; if FirstGroup gets it I imagine fares to rocket - look at the disparity between Northern and TPE and between WAGN and FCC.

If Abellio gets it I can see cost cutting across the board, shops replaced with trolleys, services short formed wherever possible, ticket office hours reduced and cattle pens, sorry, ticket barriers installed in stations.

SNCF? Well who knows?

If VWC retain it, I think the railcard easement will disappear and fares to creep up.
 

WestCoast

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I don't think you can judge precisely what a future management team will do based on other areas of a large transport business or conglomerate. I really don't think it's as simple as that. There are also franchise commitments to consider and I'd hope that a station improvement programme was included in that.

Depends who gets it; if FirstGroup gets it I imagine fares to rocket - look at the disparity between Northern and TPE and between WAGN and FCC.
TPE do offer an express product in many cases though and also offer a range of advance fares, which can often undercut interavailable or Northern fares, particularly on off-peak services. TPE is a partnership between First and Keolis (45%), a transport company where SNCF has the majority shareholding.
 

HH

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Firstly lots of fares are regulated, and they will go up precisely as DfT dictates. Secondly the threat of split ticketing from price comparison websites is likely to mean some fares go down. I doubt whether fares will differ that much between operators. Where there might be changes are:

1. They get better at managing Advance Purchase prices, which may mean that these go up a bit overall
2. Introduction of new products which people are willing to pay extra for; there are a few holes in Virgin's offering compared to what is done elsewhere. People would only pay extra if they saw benefits.

In other words there won't be much difference between operators and I don't expect huge increases in the current economic climate. Once (if) the new trains start to fill up then that will change - it's called supply & demand.
--- old post above --- --- new post below ---
TPE is a partnership between First and Keolis (45%), a transport company where SNCF has the majority shareholding.
True, but Keolis is very much a silent partner. First run it, make no mistake.
 

Zoe

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Firstly lots of fares are regulated, and they will go up precisely as DfT dictates.
Is it actually mandatory for the TOCs to increase the fares by the full amount permitted by the DfT?
 

Class377/5

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Is it actually mandatory for the TOCs to increase the fares by the full amount permitted by the DfT?
No but considering the DfT wants more from fare payer than it gives, if a TIC didn't, they not be in the best place.

I don't get the initial topic, the DfT has more influence on ticket prices compared to the operators. After ll the DfT's long term plan is raising prices by 50% to give for it withdrawing support from 50% to 25%, this is the main reason for high ticket prices on regulated (which is a lot) ones.
 

Zoe

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I don't get the initial topic, the DfT has more influence on ticket prices compared to the operators.
I expect quite a few people on this route do use unregulated fares although I'm not sure a new company running the franchise would have much effect on these fares.
 

HH

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I expect quite a few people on this route do use unregulated fares although I'm not sure a new company running the franchise would have much effect on these fares.
Advance Purchase aren't regulated, but they are like airline tickets. If the TOC needs to fill seats the price will be cheap. There's not a lot of choice of software (only one is still being developed) and the majority of staff do not change, so there is unlikely to be any significant change in price on a change of owner. The object is to get maximum sales revenue, and demand is very elastic on these tickets (i.e. raise the price and less people travel).
 

colchesterken

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where you have shareholders and ROSCo to make profits prices will go up and up
They should have just not renewed any franchises and let them drop into a not for profit
trust. with a board of people who know what they are doing
as an out of work lawyer, you could have lawyers and accountants and ex train managers, Tom Windsor, Chris Green, Gordon Petitt , All profits must be reinvested
the treasury could make the same subisidy as it pays now into the pot

""You could call it British Railways """
 

Zoe

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The object is to get maximum sales revenue, and demand is very elastic on these tickets (i.e. raise the price and less people travel).
Although if too many of these cheap tickets are sold on certain trains you can end up with overcrowding due to the walk-up passengers. The argument here of course could be made that these people should have just booked in advance and then they would have been guaranteed a seat and would have a cheaper fare but this isn't always possible.

In this case of Anytime fares though, I'm not sure the demand would change much though as quite a few people that use these tickets have no realistic alternative to rail.
 
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David10

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The general consensus of opinion is that after the bidding process is complete there is a strong possibility of VT losing the WCML franchise and perhaps being given the ECML by way of compensation.
Why would the DfT give Virgin the East Coast franchise as some sort of consellation prize?:roll: It will be fought out just as toughly as West Coast and awarded to whom the DfT thinks delivers the best bid.

The consensus is that the winner will be paying a greater premium than Virgin are now so unless they are able to increase seat yield, fares will rise. Some of course are regulated so will go up by RPI + 3% anyway. And of course they might play around with off-peak restriction times etc.
 

HH

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Although if too many of these cheap tickets are sold on certain trains you can end up with overcrowding due to the walk-up passengers. The argument here of course could be made that these people should have just booked in advance and then they would have been guaranteed a seat and would have a cheaper fare but this isn't always possible.
TOCs will generally forecast pretty accurately what the walk-up demand is. Occasionally they will get it wrong, probably due to an event they had not spotted, but most of the time the cheap seats are sold on trains with lower numbers of walk-up passengers.

In this case of Anytime fares though, I'm not sure the demand would change much though as quite a few people that use these tickets have no realistic alternative to rail.
Most of the Anytime fares are regulated and/or set by another TOC. As I noted previously, the threat of split ticketing is also going to act as a limiter on rises.
 

Zoe

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Most of the Anytime fares are regulated and/or set by another TOC. As I noted previously, the threat of split ticketing is also going to act as a limiter on rises.
Most of the Anytime fares are not regulated (where no Saver existed before 2003, the Anytime fare is regulated but I believe most intercity routes did have a Saver back in 2003) and most of the fares on the key East Coast/West Coast intercity routes like London to Manchester or Newcastle (which is where a lot of the TOCs revenue will be from) are not set by other TOCs. On some routes where there is no Off Peak fare, the Anytime fare is the regulated fare but I don't know of many of these on the intercity routes in question here. In the case of East Coast, the Super Off Peak is the regulated fare and with Virgin the Off Peak is the regulated fare.
--- old post above --- --- new post below ---
TOCs will generally forecast pretty accurately what the walk-up demand is. Occasionally they will get it wrong, probably due to an event they had not spotted, but most of the time the cheap seats are sold on trains with lower numbers of walk-up passengers.
This hasn't been the case in my experience. I have been on quite a few trains which have been packed and often seem to have cheap advance fares available. I have also noticed some relatively cheap advance fares availabe at peak times which I would have thought would have been full and standing even if there were no advance fares available.
 
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