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Railhub Archive
1999-10-26 SRA-001
Shadow Strategic Rail Authority


Regulated rail fares to rise by less than inflation for second year running

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Shadow Strategic Rail Authority

Regulated rail fares to rise by less than inflation for second year running

26 October 1999
source Shadow Strategic Rail Authority
type Press release

RRegulated fares across the network will be held, on average, to below inflation
increases next year by caps announced today by SSRA Chief Executive, Mike
Grant. Most London commuter fares will fall even further in real terms, as
disappointing performance by some operators over the twelve months to July
1999 is reflected in even tougher caps.

Since January 1999 increases in regulated fares have been held to RPI minus
1% for all except London commuter services. Using July 's RPI figure of 1.3%
most operators will therefore be held to a maximum 0.3% average increase
for the coming year.

For the ten London commuter operators the Fares Incentive Adjustment
Payment regime (FIAP) allows a variation of up to 2% above or below the
cap, depending on whether an operator's performance has improved or
worsened over the year to July 1999. There have been differing performance
levels between the region 's operators resulting in an overall average
permitted increase on London commuter fares next year of 0.3% (1% below
inflation). The caps for individual operators are:

Operator/routes % permitted % above or
increased over 1999 below RPI (1.3%)
fare levels
Chiltern Railways 1.5 0.2
Connex South Central (South London) 1.3 0
Connex South Central (Sussex Coast) 0.9 -0.4
Connex South Eastern (Kent Link) 0.7 -0.6
Connex South Eastern (Kent Coast) 2.6 1.3
Great Eastern Railway 0.8 -0.5
LTS Rail 0.5 -0.8
Silverlink -1.7 -3
South West Trains (Suburban) -1.3 -2.6
South West Trains (Main Line) -1.8 -3.1
Thames Trains -1 -2.3
Thameslink -0.3 -1.6
WAGN (Great Northern) 0.8 -0.5
WAGN (West Anglia) -1 -2.3

Some operators have not used the full allowance in 1999 and the numbers
above reflect the maximum average increase that TOCs can make. The
actual fares changes within the FIAP limits will be a matter for individual
operators to decide and announce.

The caps apply to a fares 'basket ', or group of fares, and some flexibility is
allowed in the price increases on individual fares within a basket. These can
be higher than the cap each year, provided there are decreases of equal
value on other fares to balance the basket.

The poorer performing operators will have to charge less for some tickets in
2000 than in 1999 in order to stay within the SSRA 's caps.

Analysis carried out on behalf of the SSRA has shown that the National
Average Fare paid per mile has reduced in real terms by 0.2% in the four
years from 1995/96 to 1998/99 and that the Standard Class Average Fare
mile has reduced in real terms between 1997/98 and 1998/99 by 0.16% below
inflation. These figures include both regulated and unregulated fares.

Announcing the caps, Mike Grant said:

"Whilst there may be rises in some unregulated fares next year, about 39% of
TOCs farebox revenue is regulated. Today 's announcement is good news
which should encourage more rail travel".

Notes to Editors

1. Regulated fares are normally Weekly Season tickets and the Saver or, for
shorter distances, the Standard Return. For London commuter services, and
in certain other large urban areas, a wider range of fares, including most
tickets purchased by commuters, are regulated b y means of fares 'baskets' .

2. FIAP entails balancing subsidy adjustments - i.e. the operators will have
already have had their subsidy adjusted under the incentive regimes,
depending on performance against benchmarks set pre-franchising. When
that same performance is reflected in fares caps in following year, the subsidy
payments must be readjusted or the operator would be penalised (or would
benefit) twice.

Railhub Archive ::: 1999-10-26 SRA-001


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