Our rail fares are often cheaper than rest of Europe!

Sitting at my in-laws over Christmas a couple of years ago, a national newspaper contacted me to ask for help with an article comparing UK and European train fares. It was titled ‘How far will £100 get you?’ and was based on the UK’s most expensive Anytime fares. I declined, saying it would be more interesting - and fairer - to compare prices for similar routes in different countries, booked a month ahead, a day ahead, bought on the day for off-peak travel and bought on the day for peak travel. 

Subsequently, I decided to undertake the analysis myself, if only to see if it showed what I thought it would - namely, that our train fares are often cheaper than comparable countries, unless you have to travel at short notice in the business travel peak periods. The results surprised me, so I’ve repeated the analysis here using 2017 prices.

Just as lumping National Express coach fares with TfL London bus fares would make for a very woolly discussion, analysis of rail fares lacks focus unless clearly divided into long-distance, inter-city and short-distance/commuter categories. There’s an overlap, of course, and it’s not an exact science, but the commercial, regulatory and social aspects are very different: journeys of 20 miles are made frequently, and often spontaneously. Fares regulation applies to peak Anytime fares and season tickets. 

Journeys of 200 miles are typically made less frequently, are pre-mediated, reservation is possible, and the regulated fares are the Off-Peak Returns. One could subdivide fares further, but as a bare minimum I think any fares discussion should consider long and short-distance fares separately.

Short distance fares 

Short distance/commuter fares are largely subsidised, and broadly speaking it’s a political decision between higher fares with lower subsidy, or lower fares with higher subsidy. For example, if it costs £2,000 a year pro rata to get a commuter to work, we Brits have chosen to charge him or her £1,500 for a season ticket, with £500 in subsidy. We could just as easily have chosen a £1,000 season ticket and a £1,000 subsidy, and many other countries make such lower-fare/higher-subsidy choices.

There is a powerful clause in each franchise agreement which allows the government to unilaterally vary fares regulation to facilitate such a change, but (again in simple terms) if the government wants £500 knocked off a season ticket, they have to stump up £500 in subsidy, which has to be diverted from other things or provided by additional borrowing or higher taxation. When I comment on cheap Dutch train fares and their smooth pothole-free roads, my Dutch wife responds, “Yes, but the Dutch pay 50% income tax!”

Even so, be careful when you hear fares compared. Paris to Crépy-en-Valois (61km) is 11.90 (£10.11) one-way. London Victoria to Maidstone East (64km) is £21.80 one-way. At face value this seems shocking, but on French regional trains there are no off-peak fares and a round trip is twice the one-way cost. So Paris to Crépy-en-Valois is always 23.80 (£20.11) return, whereas London to Maidstone is only £17.90 with an Off-Peak return. Cold comfort for commuters perhaps, but in this case the British route is cheaper. 

Long-distance fares

I’m going to focus primarily on long-distance routes, where in the UK both the Anytime (fully-flexible, peak) fares and the cheap Advance fares are unregulated, and set commercially in competition with other travel operators. Fare structures are so different in each European country that it’s often like comparing not merely apples and oranges, but entire fruit bowls of differing fare types and approaches to one-way and return journeys.

A professional study could cut through such differences by calculating the Average Fare Paid (done by dividing total revenue by total passenger numbers on a given flow, something which could legitimately be compared between countries). Fares and flows could be aggregated further into a fare per km, but even here you’d need to be careful when comparing countries; a network consisting mainly of short and medium-distance routes might be expected to produce a higher price per km than a network with a high proportion of long-distance routes.

Such studies require access to commercially-sensitive revenue data, and with no such luxury at my disposal, the following analysis can only be classed as a straw poll. Still, I think it reveals more truths than you read in the papers…

The test...

I picked four similar routes: London to Sheffield (265km), Paris to Dijon (287km), Rome to Florence (261km) and Nuremberg to Kassel (265km). The fourth route was the first inter-city German route of about 265km that I came across while flicking through the German part of the European Rail Timetable. 

So, no cooking the books in my choice of routes - I was doing this for my benefit as much as anything else. I then used sterling for UK prices, Euros for French prices, Euros for Italian prices and Euros for German prices. It’s very simple to do - you can easily try it for yourself using the same or different routes.

Conclusion..

So the next time you hear that “Britain has the highest rail fares in Europe”, you’ll know that this is only a small part of the story, at least on longer-distance routes. The other part of the story - the most important part - is that we have similar or even cheaper fares. The truth is that Britain has the most commercially-aggressive fares in Europe, with the highest full-flex fares designed to extract maximum revenue from peak business travel, along with some of the lowest fares designed to generate revenue by filling empty seats and competing with cars, coaches and planes. This is precisely what airlines have known and have been doing for decades. In fact, the next time anyone tells you that the train fare to Manchester costs more than the air fare to New York, remind them that it doesn’t. I’ve just checked. For a full-flex economy-class return fare from Heathrow to New York on a flight leaving in an hour’s time, British Airways want £1,810...

This article can be found in: RAIL 818: January 18 - January 31 2017