Rail 547: Rail should seize the moment

It’s been a glorious August for the railways as terrorism fears have made airline travel a nightmare. But why, asks CHRISTIAN WOLMAR, hasn’t the industry shouted its successes from the rooftops?

IT may have been a lousy August for aviation but it was a great one for the railways. Thousands of people discovered that Britain has a pretty good rail network and they flocked to use it. Extra trains were provided and suddenly people realised that even a trip between London and Scotland can be faster by rail if you take into account the hassle of travelling to the airport, security and delays.

However, there was a lack of effort by the railways to try to transform this brief period of airport chaos to their long-term advantage. For example, Eurostar was, for once, quite literally full although oddly it did not provide extra trains despite having plenty of spare rolling stock. Nor did it issue any press releases, explaining its situation, which seems rather lax given that the company had a unique opportunity to promote its wares.

Virgin, to its enormous credit, accepted airline tickets on its trains to Glasgow and Manchester, allowing people a free journey, but it did little to publicise this enormously generous offer. GNER put on extra trains but, again, with little or no fanfare.

It’s tempting to say this is a seminal moment when people will abandon short-haul and particularly domestic flights for the railways, but we have been here before when similar predictions have not been realised. The 9/11 attack was widely expected to mark ‘the end of the aviation industry as we know it’ but, in fact, our desire to jump on planes has proved insatiable.

In a way that is because people make a realistic assessment of the risks. Despite the enormous coverage of terrorism, most people understand that you are more likely to be killed crossing the road. There have been no successful terrorist attacks on Western aircraft since then, nor indeed any fatal crashes on any of the world’s major airlines operating principally in the West or the USA since just after 9/11 when 260 people were killed in an American Airlines Airbus. In other words, aviation is very safe and people are intuitively aware the risks are low.

But the hassle is another matter. If Ryanair is unable to persuade the Government to relax some of the restrictions, security may become too onerous. Being forced to turn up two or three hours in advance for a short hop makes rail a much better prospect. Therefore, railways should try to seize the moment. If the railways were a properly organised, mature private sector industry, there would be widespread publicity boasting of its achievements in carrying many stranded air passengers and of the potential advantages of letting the train take the strain. There would be immediate plans for expansion and lots of talk about how trains are the new planes. Instead, there is virtual silence.

Moreover, train travel is often more of a hassle than before, despite the advantages of new technology. The railway companies seem to be unaware that for many people, taking a train is a completely alien concept, even when it offers a more convenient and cheaper journey than the alternatives. And when these people take the plunge and try to take a train, the railways present such a user-unfriendly image that it puts them off.

My friend James rang me the other day and said: “I need to take a train for the first time in years, how do I do it?” He had spent a fruitless half-hour being shuttled between National Rail Enquiries and First Great Western, both of which told him the other would sell a ticket for his journey to Cornwall. He then visited the FGW website which he said was incomprehensible: “What is the difference between a first minute fare business and a standard open return?” “The price, James, the price,” I said wearily but when I went to the website, it was indeed utterly incomprehensible even to an old hand like me. No one cares what the name of the fare is, just what they can expect to pay. Th e pricing structure is a minefield with none of the simplicity of the low-frills airlines.

Then there’s my friend John who has been battling with thetrainline.com for nearly two years over the fact that they charged him £10 when he attempted to cancel a ticket which he realised, within seconds, was a single when actually he wanted a return for just £1 more. There is no justification for such a charge given that the marginal cost of online bookings is virtually nil, and it’s merely a way of deterring people from trying to obtain refunds and putting them off taking trains.

Take another friend, Liam. He wanted to book a ‘sleeper’ to Scotland but they only come online three months before travelling by which time the no-frills airline deals have probably all gone. He asked ScotRail when the days he wanted to travel would come online but the operator couldn’t tell him because of fears that too many people would try to log on simultaneously if the time were publicised.

So he booked with Ryanair instead, but then found himself at Euston benefiting from Virgin’s generosity because he chose to travel on the very day that the alleged plot was exposed and the hand baggage restrictions first imposed. Now he says he will make greater efforts to take the train in future as the trip up was so pleasant.

These are just random rants from friends who have been in touch over the past week or so. They want to take the train, they are motivated because of its convenience and environmental-friendliness, but they are put off because of the price and the inaccessibility of information.

The trouble is, I can’t even see how these problems can begin to be addressed in the present structure. Can you seriously imagine ATOC calling a meeting and saying, right, we have to make getting on a train more user-friendly, ticketing systems more simple and fl exible, and try to reach out to the large swathes of the population who might well take a train if only they realised its advantages? The ticketing system is incomprehensible, unfriendly and old-fashioned. The railways are not perceived as accessible, and very expensive ordinary fares are a great deterrent to new users.

Then there’s the wider picture. The Government is producing a 30-year strategy, but how will that meld in with the short-term interests of franchisees who often can see no further than the current year’s profit and loss account?

This really needs addressing in a concerted and radical way. Trains clearly are the future, and yes, Wolmar’s golden rule of railway economics applies: if you want more people using them, it will require more subsidies. However, spending taxpayers’ money in this way is justified by the environmental and other benefits of an efficient railway system. This should be the age of the train but, sadly, all the pointers are that the industry will miss out. Prove me wrong, someone!

Rail’s bonkers economics

I’ve often written about the madnesses of the economics of the railway but the latest example takes the biscuit. The ORR document which I mentioned last issue was about aligning incentives. In other words, how could it be made possible for the interests of operators and Network Rail to work in the same direction? Well, if the recent fate of GNER is anything to go by, the task seems insuperable.

One of the reasons the company is in trouble is that it has not achieved suffi cient growth – merely a third of the 9.9% it had hoped for by now. Another is, of course, the predicted impact of the new open access operator, Grand Central, though it does seem GNER has infl ated the prospective losses somewhat (Analysis, RAIL 546).

Then there are electricity prices which GNER failed to properly estimate in its bid and will cost the operator £11m more than expected. But the fourth reason is the most bizarre: Network Rail has done too good a job in reducing delays, notably thanks to its strengthening of the troublesome overhead electrification. Its sad statement to investors does not elicit much sympathy: “One [part of variable track access charges] relates to payments to GNER by Network Rail for its performance failure or disruption to timetable through planned maintenance work by Network Rail, and the other relates to payments from GNER to Network Rail for providing improved rail infrastructure performance. Network Rail’s performance is now expected to be better than anticipated in GNER’s franchise plan so that net payments to Network Rail should continue at a higher level than planned.”

In other words, poor old GNER had expected to get lots of lolly in compensation for the inconvenience that its passengers suff er but instead Network Rail has been too efficient.

Now if the incentives were aligned properly – a very difficult if not impossible task – surely the compensation scheme would be cash-neutral. In other words, GNER would have to pay the same amount in compensation to passengers as it receives from Network Rail. But, of course, the two figures bear no relation to each other. Moreover, of course GNER is likely to get more customers if it provides a good service, and therefore it’s quite right that it should get less compensation when Network Rail provides a better service. But clearly its bottom line has suffered and that’s all it cares about. Does anything else demonstrate so graphically that the economics of the railway are completely bonkers?