Rail firm plans ^1 seat charge as crunch hits franchises

[whole diary]

[Timmer]

Could see headlines like these more often as the TOCs^▸ (Train Operating Company) come up with ways to balance their books during the economic slowdown:
http://www.guardian.co.uk/business/2009/jan/18/national-express-reservation-charge

"It's not clear whether some franchises can deliver the expected profits if recession now depresses growth in passenger revenues," said Douglas McNeill, analyst at Blue Oar Securities. Further evidence of the financial strain on train operators emerged as the chief executives of the so called "big five" - Stagecoach, National Express, Go-Ahead Group, Arriva and FirstGroup - prepare to meet the transport secretary. Go-Ahead has already warned that rail services might have to be reduced to save costs.

That is going to be a very interesting meeting between the TOCs and Geoff Hoon this coming Tuesday 20th.

[Ollie]

Well as it stands FGW^▸ (First Great Western) only provide a free reservation when you get it with the ticket and request one. If you ask for a reservation later there is a charge.

[Lee]

That is going to be a very interesting meeting between the TOCs^▸ (Train Operating Company) and Geoff Hoon this coming Tuesday 20th.

More on this in the link below.
http://www.firstgreatwestern.info/coffeeshop/index.php?topic=3613.msg27930#msg27930

[bemmy]

That is going to be a very interesting meeting between the TOCs^▸ (Train Operating Company) and Geoff Hoon this coming Tuesday 20th.

If the TOC's can persuade the government that railways are of national importance he'll bung them a few million. Unfortunately for them, the government reckons railways are a luxury most of us shouldn't be able to afford.......... plus there's this bottomless pit called the banking industry that they need to borrow billions to throw into. So the the TOC's plan B will be to get the franchise contracts changed so they can cut services.

[Timmer]

So the the TOC^▸ (Train Operating Company)'s plan B will be to get the franchise contracts changed so they can cut services.

And you can bet thats exactly what will happen and the government will just wave them through as long as they still get the agreed premium payments.

[Lee]

Quotes from the link below:
http://www.guardian.co.uk/uk/2009/jan/19/recession-rail-industry

It is understood that the chief executives will discuss allowing "flexibility" in their rail contracts, which guarantee huge payments to the government over the next decade including ^1.4bn from National Express East Coast and ^1.2bn from Stagecoach's South West Trains. The Department for Transport is adamant that it will not renegotiate contracts and reacted to the financial troubles of the previous east coast operator, GNER^▸ (Great North Eastern Railways), by stripping the company of its ^1.3bn deal in 2006 and putting the contract out to auction. A government source told the Guardian last week that the franchise owners had yet to approach the DfT^» (Department for Transport - about) with a proposal and, until then, they will be expected to honour contracts that were signed when the rail sector was riding on the coat tails of an economic boom.

The executives will attend the meeting armed with evidence that a boom period for the railways could be drawing to a close. According to figures seen by the Guardian, the number of rail journeys last year rose by less than 5%, down from 7.8% in 2007 and 6.7% in 2006. The tail-off in passenger growth follows an even steeper fall in revenue growth in the final two months of last year, with fare income rising by just 4% - prompting fears that some franchise contracts are coming under pressure. Analysts have warned that some recently awarded contracts need revenue growth closer to double figures to keep pressure off their owners.

Franchise owners have slashed more than 1,500 jobs recently, with National Express cutting 750 across its business, South West Trains shedding 480 and Go-Ahead's Southeastern losing 300. National Express also admitted this weekend that its East Coast operation is considering charging passengers at least ^1 to reserve a seat. Other franchises have expressed private sympathy, saying that too many customers make multiple reservations and never use them, but they have disregarded it after deciding that the public would react badly to extra charges when many fares are rising by as much as 10%.

[Lee]

Further related links.
http://www.theherald.co.uk/news/transport/display.var.2482929.0.Key_train_services_under_threat.php

http://www.journallive.co.uk/north-east-news/todays-news/2009/01/19/national-express-train-seat-booking-fee-is-a-stealth-tax-61634-22722136/

http://www.thisislondon.co.uk/standard/article-23623322-details/Fears+for+rail+services+in+downturn/article.do

http://news.bbc.co.uk/1/hi/business/7839150.stm

The Association of Train Operating Companies (Atoc) declined an offer to speak to the BBC^» (British Broadcasting Corporation - home page), but earlier a representative said the meeting between Mr Hoon and Stagecoach, National Express, Go-Ahead, Arriva and FirstGroup, was nothing out of the ordinary.

He added: "Some off-peak trains may be reduced in length, but I don't think anyone at this stage is talking about service cuts."

[Phil]

Rail firm plans ^1 seat charge as crunch hits franchises

FGW^▸ (First Great Western) will probably interpret this as an opportunity to charge ^1 per seat in addition to the regular ticket price