Different types of passengers require different types of fare

Flicking through some Transport Focus survey results the other day, I was struck by two things. London-Shoeburyness train operator c2c topped the rankings, with 91% overall satisfaction between September 2023 and June 2024. However, I found it also propping up the bottom of the table when it came to value for money, with a score of just 46%. How can an operator be, at the same time, top for overall satisfaction and bottom for value for money? I turned to Anthony Smith for the answer, leaning on his 20 years running Transport Focus and its predecessors. It’s commuters, he explained. “You can’t please commuters, you can only not displease them.”

He argues that in general commuters hate going to work and see rail fares as a distress purchase, hence their poor view of their value. Further figures support Smith’s view. Joining c2c at the bottom of the value table are Thameslink, South Western Railway, Southeastern and Southern - all of which rely heavily on commuters.

But who’s at the top? London Overground, followed by Merseyrail. They carry commuters, but also plenty of other passengers travelling for many reasons. They also have low fares, delivered by contactless ticketing, and strong support from local government. This could be what makes them different from an operator such as SWR, although it cannot carry just commuters, given how busy Waterloo’s concourse is throughout the day.

According to Smith, the highest ratings for value for money come from passengers using long-distance, advance purchase fares, and they tend to be older and female. This is a market that open access operators do really well. And the railway seems to be moving inexorably towards advance purchase, fixed-train-only, as the default option for journeys not covered by ‘pay as you go’ contactless ticketing - as shown by LNER removing more off-peak flexible tickets. However, there remains a middle ground of journeys between regional destinations. Fares here can be relatively high, with inexperienced passengers not realising they could split their tickets for a cheaper overall journey rather than deciding to drive instead.

Keener pricing in this area could help fill empty seats and bring to the railway revenue that it is otherwise missing. It’s vital that pricing managers in train operators know their game and set fares to sell seats. It might be here, away from the inter-city network and London, that the idea of a ‘climate ticket’ could take hold - as pioneered in Austria in 2021. It’s the subject of recent work by Greengauge 21 for Greenpeace, and sees passengers pay a monthly subscription for rail travel (or perhaps wider public transport). Such tickets have restrictions. Germany’s version is not valid on inter-city or high-speed services. In France, passengers cannot use their version to, from or around Paris, for example.

A British version will need careful thought to balance restrictions on inter-city services with reasonable network coverage.

The London-Manchester passenger might travel by London Northwestern Railway to Crewe and then change to Northern into Piccadilly, so avoiding Avanti West Coast’s inter-city service. But how about London-York? Greengauge 21 and Greenpeace suggest using LNER’s all-stations service between the two cities, suggesting that it’s an inter-regional service.

Perhaps it is, but trying to explain that a UK climate ticket is valid on some red and white LNER trains leaving King’s Cross but not others is a recipe for confusion. That shouldn’t discourage work to develop such a welcome ticket option, but it does show that there are pitfalls to avoid and careful choices to make. Department for Transport figures suggest that the railway is now almost as busy as it was before 2020’s pandemic. It still publishes daily figures every so often, and the latest shows periods in July and August that top 100% of pre-pandemic travel.

However, a separate column in DfT’s spreadsheets splits out the effect of London’s Elizabeth line, which opened in May 2022 and boosted rail’s figures because it included journeys that could not have been made by rail before the pandemic. Without the Elizabeth line, rail’s figures sit back at around 90% of pre-pandemic travel, which shows that at a national level there are still seats to fill. The DfT’s figures also cover London Underground. This makes it possible to see a little more how commuter traffic might be faring. In very rough terms, summer 2024 saw passengers making around 75% of the journeys they made before the pandemic on Mondays and Fridays. On Tuesdays, Wednesdays and Thursdays, this figure was closer to 85%.

So, the change in working patterns for office staff who can work remotely from home continues. This poses a challenge for rail companies with heavy commuter traffic. They have stock and crews sized for a weekday peak commuter timetable, but now only need it for three days out of seven.

Scotland recently experimented with removing peak fares to make travel possible all-day at off-peak prices. This trial ceased in late September, and a passenger using an off-peak day return between Edinburgh and Glasgow (for example) saw the fare rise from £16.20 to the anytime day return price of £31.40. In evaluating the trial, Transport Scotland (TS) found that most people taking advantage of cheaper fares were existing passengers making existing journeys. Scottish ministers wanted the trial to improve awareness of rail, to improve access to rail at peak times by cutting fares, and to reduce private car travel.

It succeeded in the first two goals. A TS survey suggested that people had become more aware of rail as a transport option, and the trial did significantly reduce peak travel costs (with an average saving of 17% across all ticket types).

In reducing car travel, it appears less successful, with around two million rail journeys in nine months that would previously have been made by car. TS reports that this represents a reduction of less than 0.1% in carbon emissions from cars. All this at a cost of £25 million to £30m, with TS admitting that the figure might be as high as £40m. The range depends on how you assume rail travel might have changed without the trial in place. TS worked with an assumption that it would have returned to around 90%, in line with the rest of the UK. All this gives plenty of ideas for the way in which fares might be reviewed. The rail industry needs to drive revenue up, which means filling empty seats. But not every passenger is the same - a one-size fares policy will not fit all.