Features

Platform: Supply and demand

30 Sep 2013 by Alex McWhirter

Alex McWhirter has his say on the issues facing rail passengers. This month: Supply and demand
 

A recent post on our online forum about the high cost of a Cross Country Advance fare between Manchester and Exeter got me thinking. Booked five days ahead, the cheapest standard class ticket for a trip on a Friday morning in July providing a noon arrival in Exeter cost £114.50.

Yet a journey of the same length (booked five days ahead for the same date and time) between Manchester and London with Virgin Trains cost £65 first class, which was actually a few pounds cheaper than standard class. (I explained this quirk in an earlier column). What’s more, the Virgin passenger would get free food and drink.

I checked the fares again for a Friday in August and got the same results. Why? Well, the train operating companies (TOCs) will not discuss fare levels for political reasons. I contacted Cross Country (should there have been a change of heart) but got the standard reply: “Cross Country is not prepared to discuss the issue at this time.”

As I see it, Cross Country is akin to a commuter airline. In other words, it provides important regional links with passengers paying for the convenience. It operates shorter train sets (usually only five coaches) and, from the Cross Country services I have seen when travelling around the UK (it does not serve London), they are well patronised. There are few direct trains between Manchester and Exeter. At most times of the day passengers must change in Birmingham, so this also has an impact on seat availability.

Conversely, Virgin Trains is plying a trunk route. It departs Manchester for London every 20 minutes with nine- or 11-coach Pendolinos so, just like a major airline, it is offering many more seats and needs to price keenly to fill them.

Rail fares can also be distorted by the level of airline competition. Nowhere is this better illustrated than by comparing the cost of a ticket for London-Newcastle, where rail is the market leader, with London-Edinburgh, where air reigns supreme. The Scottish capital is about 200km further from London King’s Cross yet the cost of standard class tickets is but a few pounds more.

Standard class Saver tickets for London-Newcastle range between £122 and £196.50 and can be used for most trains, with some exceptions in the peak hours. A fully flexible standard class ticket costs £301. A London-Edinburgh Saver ticket in standard class costs either £126.70 or £201, with some peak-hour restrictions.

A fully flexible standard class ticket for Edinburgh costs £304. Only the uninitiated would pay that price because on London-Edinburgh, East Coast (the TOC which plies the route) has a first class Scottish Executive Ticket costing only £229 return.

What’s the catch? This ticket is sold at a fixed price (unlike Advance fares, which fluctuate in line with supply and demand) and the main restriction is that the outward journey must be booked by 1800 the day before travel. The return can be left open-dated so if your meetings finish early or end late you can still take the most convenient train.

What about flexible first class? For London-Edinburgh the price is £316 return but, again, if you plan your outward trip a day ahead you need not pay this price. And London-Newcastle? This is where East Coast exploits its dominant market position. You will pay rates of £313 off-peak or £418 peak for flexible tickets. In other words, first class travel for the shorter London-Newcastle trip can cost almost twice the rate for London-Edinburgh.

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