Wednesday 10 August 2022


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rail unveiled

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the problem of the peaks

Commuters travelling in the rush hour, and paying several thousand pounds a year for their season tickets, naturally assume that the train operator is making a lot of money.

But do rush hours really generate big profits?

Do rush hours generate big profits?

Unfortunately for railway companies (perhaps), the answer is no. Rush hour timetables are actually very expensive to operate, because they make use of assets (trains, tracks, staff) which are not used to the same extent throughout the rest of the day. The train that takes you to Victoria at 08.19 could be in a siding within the hour, and there may be no further use for it until later that day, when you want to be taken home again.

This is not cost-effective, because the costs of the assets are much the same whether they are used or not.

It is true that an element of the leasing charges paid by the operators is related to how many kilometres each train clocks up, and of course moving trains also consume fuel, but trains sitting in sidings all day are still very expensive ornaments.

This is one reason why off-peak services on many lines are still frequent, but fares fall sharply so that at least some of the seats are occupied. The trains are available and the crews are still on their shifts, so it makes sense to use them. Passengers may be paying less during the day, but this marginal revenue is still worth having, because it costs very little extra to earn it.

A further problem for train operators is that season ticket rates, especially annual ones, are heavily discounted. If you compare the cost of, say 230 Anytime returns on your route with the price of your annual season ticket you will find that you are saving around 30%.

Commuting by train is not particularly cheap, but the costs probably seem more extreme because they are often paid annually. In fact, it would probably cost you more to drive to work, particularly if you would also be faced with city centre parking charges.

the capacity crunch
why dont operators buy more trains?


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