In recent years the number of passengers using UK trains has grown steadily making UK rail the envy of Europe.
But the latest passenger figures release by the Office of Rail and Road paint a disappointing picture.
In short, the number of rail passengers, in the first quarter of 2017, actually declined by 2.7 per cent overall. This is mainly due to a steep 11 per cent decrease in season ticket sales.
The latter is serious from the revenue viewpoint because more and more commuting takes place over longer distances.
This especially applies in the case of London where commuters travel into the capital from places as far out as Bedford, Brighton, Colchester and Peterborough.
The decline in passenger numbers would have been worse had it not been for a modest increase in sales of off-peak (up by 1.9 per cent) and anytime/peak tickets (up by 2.4 per cent).
However the bright spot was the big increase in travellers booking Advance (promotional) fares whose sales jumped by 8.4 per cent.
The latter is a result of travellers being increasingly canny (with the ticket type they purchase), an increase in online booking and the train operatoring companies (TOCs) themselves relaxing the restrictions attached to Advance fares.
Previously all Advance tickets had to be booked no later than 18.00 the day before travel. But some TOCs, in particular Cross Country, Virgtin Trains (VT) and Virgin Trains East Coast (VTEC) now allow Advance tickets to be purchased on the day of travel.
However cannier passengers mean less revenue for the TOCs.
It’s a worrying development because TOCs bid (and pay) for franchises based on passenger growth.
If growth slows then the TOCs may face trouble in repaying their franchise fees.
This is a fate which has already befallen VTEC which had agreed to pay the government a hefty £3.3 billion over the eight years of the East Coast Mainline (ECML) franchise. VTEC is now in the process of renegotiating its franchise payments with the government.
And the decline in commuting is believed to be affecting Abellio who operates the Greater Anglia franchise according to a report in the East Anglican Daily Times.
Doubtless there will be other examples in the months and years ahead as regulated * rail fares in 2018 will (unless the government intervenes) rise by 3.6 per cent next January.
- Note: regulated fares refer to seasons and normal flexible tickets. They do not include promotional and Advance ticket sales which TOCs can sell at whatever price they wish.
