Cost-effective capacity uplift on West Coast, part two
In the Huffington Post article ‘How Rail Companies Could Avoid Increasing Train Fares‘, Henry Stewart questioned whether first class passengers on GB rail pay their way. On the (currently FoI-able) East Coast service, first class carriages appear to produce substantially less income.
[25 Aug 2014]
[…] It was reported earlier this year that the government was to pay one operator (First Great Western) to convert a first class carriage to standard class. However it is not clear why government subsidy is needed to make a change that seems to make blindingly obvious business sense.
If standard class carriages generate 61% more income, then it would seem to be a simple financial decision to start converting first class carriages on their own initiative? This does depend on more demand being created for standard class. But, given the crowded nature of many services, and the fact that first class use is normally such that it could be fitted into less carriages, it seems likely to lead to extra income.
This also adds weight to the argument of those campaigning against HS2 that an easier way to increase capacity would be to convert first class carriages to standard class on the lines to Birmingham, Leeds and Manchester.
So we seem to have a case of all rail operators (except Chiltern, who did remove nearly all their first class carriages) pursuing a policy that annoys and disrupts the majority of its customers (those packed into standard class) and makes no financial sense at all. Instead of increasing rail fares still further, converting first class carriages to standard class could be a direct way to increase income.
None of this should come as a surprise to readers of the Beleben blog.
[Beleben blog, July 2011]
there’s no evidence […] that First Class is a cash cow that subsidises Second Class travellers.