Rail ticket prices – what premium for HS2?

The price of train tickets is a topical subject now that we know the average price rise for train tickets will be just over 6% in January 2013. However who has stopped to consider the premium involved in buying a high speed rail ticket?

Assuming you want to travel the following day (on a weekday) leaving your starting station in the region of 08:00 to 10:00 prices have been compared for a single journey on both “classic” rail and high speed rail.

Fare premium for high speed rail

Ashford (International) – London20%48% at non peak times
Paris – Lyon13% to 46% 
Florence – Rome43% to 123% 
Frankfurt – Dusseldorf53% to 90% 
Madrid – Barcelona115% 
Amsterdam – Brussels206% 

 

Imagine you need to travel regularly from Birmingham to London (or Manchester to London) and the ticket price cannot be reclaimed on expenses, would you be prepared to pay the kind of premiums listed above to travel on High Speed Two? It is recognised that there are cheaper deals if you buy your ticket several days or weeks in advance, but not everyone can plan their journeys in that way. Furthermore season ticket holders using Javelin trains (HS1) in Kent pay a 20% premium over travellers using “classic” rail to reach London.

By comparison, a 6% price rise is a storm in a tea cup.

Anyone needing a reminder of the DfT’s decision not to use a premium price ticket in their modelling of HS2 passenger numbers should see this short video of Margaret Hodge at a Public Accounts Committee meeting in April this year: http://www.youtube.com/watch?v=h92e6ycM48k  She described their decision as “bonkers” and it was recognised that premium priced tickets would reduce the DfT passenger forecasts.

Note: analysis performed on 14th August for travel on 15th August 2012.

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31 comments on “Rail ticket prices – what premium for HS2?
  1. Actually, fares are likely to come down after HS2.
    With 1000 seats every 15 mins to Birmingham, they will want the seats filled up.
    They also will want to tempt people off the overcrowded WCML and onto HS2 – done by lower fares.

    This will release much needed capacity on the WCML, allowing additional stops, improving connectivity for the Homes Counties.

    I think it has been confirmed that there will be no “premium” for HS2 passengers.

    • This sounds to me like build it and they will come but only if the fares are cheap enough ( I.e heavily subsidised by every taxpayer)
      Where does it say there will be no premium fares for hs2 please?

    • I like your optimism Will, but the facts appear to indicate otherwise. If you refer back to my blog “Too Much of a Good Thing?” which was posted last October (http://stophs2.org/news/3606-too-much-of-good-thing), you will see that demand to travel between the two cities of London and Birmingham by rail just doesn’t justify frequent HS2 services using 200 metre trains, let alone 400 metre.
      Offering cheap fares on services that are running at less than a quarter full appears to require massive subsidy. Is that what you want?

        • I don’t know what rail growth will be between now and 2043 any more than you do Morris. All I can say is that HS2 Ltd has predicted that the trend (i.e. average) growth over that time will be about 2% and then will be 0% for the years after.
          The reason that HS2 Ltd is predicting 2% rather than your “6% and rising” is that there is a general agreement that the bouyant growth seen in the past few years is a temporary factor brought about by identified stimuli. It is not a good idea to jump forward whilst looking backwards,

      • Demand is not limited by London-Birmingham, all services going further north will use HS2 as far as the Birmingham interchange close to the Airport/M42 station, where they will rejoin the old network until such time as the northern extensions are completed. The critical southern part of WCML will get much needed relief early on.

        • But Graham, according to the timetabling plans that HS2 Ltd has published so far, about one third of services on Phase 1 will be London-Birmingham only. So whatever passenger demand is for other services will not help the situation on the London-Birmingham service.
          Further, since L-B will be the only all high speed service on Phase 1, it is bound to be the “flagship”. All those empty seats will not look good.

      • Please correct me if I am wrong, but surely a 400m train -1000+ seating capacity – is comprised of two 200m trains coupled together- when demand requires,- such as at certain peak times,
        The international Thalys services, like the TGV trains ,are usually made up of two trainsets coupled together, but each unit can be operated alone.
        The same obtains on the Javelin trains on the HS1 between St Pancras and the Kent coast; 6 coach units which are doubled up at times of peak demand.

        Much has been made of the issue of premium fares for HS2- “pointy nosed trains for rich fat cat businessmen…” and such.
        Yet now Prof. Andrew McNaughton, Chief Engineer of the HS2 project, has stated THERE WOULD BE NO FARES PREMIUM on the LINE .

        If he is proved wrong, then the objection to a two level railway service- one for the wealthy, another for the peasants, stands.
        But what if he is proved correct? Well then this portion of the objection goes out of the window as being irrelevent- just like those assertions that HS2 would be “at least twice as wide as a three lane motorway”, “wider than the Wembley pitch” or “concreting an area greater than Manchester”- all good rabble rousing stuff -but now quite discredited.

        • John Webber says:
          August 25, 2012 at 4:07 pm

          ‘Yet now Prof. Andrew McNaughton, Chief Engineer of the HS2 project, has stated THERE WOULD BE NO FARES PREMIUM on the LINE .’

          Please provide a link for this very significant statement and its context

            • Thanks lellio

              So the full quote is—

              Ergonomics is important to McNaughton and he’s starting from the assumption that the trains are going to be full. The design’s starting point was that there would be no premium on the fares to use the service, he said. ‘That would have been counterproductive, and make it a very expensive way to move fresh air around,’ he commented

              Key words are ‘assumption’ and ‘designs starting point’

              There is not and cannot be any guarantee of no premium fare.

            • Well I read the “old” (May 2012) article from start to finish.
              I am afraid that I cannot see the section where it is confitrmed that Andrew McNaughton will be responsible for setting the fares on his dream project. Like a lot of the rest of the “evidence” or “business case” that has been “presented” it seems very vague as I assume that once he has designed it and it has been built he will move on to something else, maybe even phase 2, and the line will be sold off to a train operating company.
              I wonder if they will bother to read this article when setting the fare structure up?

          • John, in reply to your question, the item,with the heading “No Fares Premium”, appeared under “News In Brief”on page 15 of RAIL magazine issue 701, dated July25- August 7 2012.

            “HS2 Chief Engineer Andrew McNaughton revealed there will be no premium fares on the line, despite much reduced journey times…”

            As this is so much at varience with what most people expected, I have been looking for further detail or confirmation, but so far have not found anything.

            * The statement appeared in the same issue as the feature on Prof McNaughton’s vision for the HS line’ but he doesn’t seem to mention the fares structure.

            If one were to try to explain charging the ‘standard ‘ fares without a premium, perhaps it could be suggested thus:

            The historic network – especially sections of the West Coast main line- carries a range of different kinds of traffic- long distance express trains with very few intermediate stops, other long distance services stopping more frequently, regional and outer suburban services and local stopping trains stopping at all stations, especially between Milton Keynes,or Watford and London, or between Rugby and the West Midlands.
            Add to this increasing container traffic feeding into the network from Southampton and the Haven Ports of Felixtowe and Harwich- and with further development of the new London Gateway and Grain container terminals flanking the Thames estuary, much more in the near future…all trying to find paths on two and in parts just one pair of rails for much of the route.

            Already some places are complaining that their stopping services are threatened by the introduction of high frequency fast non stop trains being given priority in the allocation of precious ‘paths’ at peak times.
            And because a stopping service ‘consumes’ several potential paths on a shared pair of tracks, then it is all the more difficult to provide more paths for new freight services.
            *(The tube lines in London can only manage a two or three minute service frequency at the peak, because all the trains are travelling at similar speeds and and all stopping at the same stations,)

            If a fast non stop train doesn’t serve intermediate towns, then it is no loss to them if it is diverted onto a new set of tracks -or even an entirely new route… just as an express coach is routed via the bypass or motorway rather than being stuck in slow town traffic behind the local bus.

            ***But if your long distance train is to be diverted to a new route, should you automatically be expected to pay extra for continuing to use a service to get you from A to B, even if it is speeded up?***

            ( Especially if diverting some services that pass through but which don’t serve intermediate towns, means that more paths are freed up for new services, freight and for passenger trains that do serve them- or at the very least , improve punctuality by reducing delays caused by congested lines.)

            • Yet another area where we urgently need clarity and transparency
              The DfT should do what the PAC requested and produce a bcr which includes premium fares for HS2 and all the other changes that have been requested by the PAC and TSC

        • An awfully expensive gamble if he is wrong and as much of the “evidence” or “business case” appears unsupportable or based on poor thinking so far………

          The point here is that you cannot put things back to how they were if you make a mistake in this case. That is why a lot of STOP HS2 supporters would like unambiguous and reasoned responses from HS2 Ltd. My opinion is that they and Justine Greening are pushing this through regardless and as yet I cannot see why.

          I thought that a recent comment about JG and the rumoured Cabinet reshuffle spoke volumes……”she may be moved on to avoid any conflicts of interest ove Heathrow’s third Runway” A fine example of NIMBYism.

          • “and I cannot see why”… In the case of Justine Greening, it’s because she’ s implementing an expressed Government policy; one which was supported in general terms if not in detail, by all three major parties, before the last election.

            With regard to HS2 Ltd, they are the company set up to plan for, design and execute the building of HS2.
            They are contractors, not conspirators- so why do they get the flak?

            ** If you or I were to commission an architect and a builder to construct a house, their responsibility would be to carry it out to the best of their ability and in consultation ,but the decision to build remains ours, not theirs.**

            Hs2 Ltd. are doing what they have been commisioned to do. The responsibility is that of the Government.

            • So she stays in her position until a “policy” comes along that she does not agree with and she is moved on?
              Sounds like the basis of solid government and the arrival of a third runway at Heathrow.

              However, I still do not see why they are attempting to steamroller this through with undue haste and an apparent lack of attention to detail.

            • Hmm and whilst on the subject of attention to detail, I think that you missed the point.
              Yes I understand their roles, but thanks for your confirmation of that anyway.

              I would expect a lot more from my “architect and builders” for the money to be honest.
              If I had hired people with this lack of communication skills and an apparent attitude of going through the motions just to tick boxes, I think that I may well have sacked them by now.

    • Will your view is not supported by facts.
      Fact: High speed rail carries a price premium in many countries (including the UK) as has been illustrated above.
      The UK Public Accounts Committee expects High Speed Two to have premium priced train tickets.
      Fact: High speed rail runs at low passenger utilisation in a number of countries, partly as a result of premium pricing.
      Fact: The majority of high speed rail lines run at a loss, which is covered by taxpayers. Where private companies set up high speed rail lines in Holland and Taiwan, these have received financial aid from their governments.
      If rail operating companies offered cheaper rail fares, these would require subsidising by the taxpayer.
      High speed rail does not have a sustainable economic case.

      • When qualified by phrases like ‘in many countries’, ‘in a number of countries’ or ‘the majority of’, the “facts” presented are less than cast iron and appear to be opinions.

        When looking at premium pricing you also need to take into account the sometimes very high levels of subsidy that seem to apply in some countries judging by the very low fares charged on standard lines when compared to the GB as well as issues like time saved.

        As far as HS2 is concerned we head not only into the deep future of the 2020s but also the dark realms of economics and political dogma – hard facts are limited! For the business case, is the purpose of the line to carry many passengers at low prices or fewer at higher premium prices? – in terms of overall revenue a balancing point between these options can be imagined but with fares already skewed to price people off the network at peak times the true picture is probably guesswork (also known as economics!).

        • Isle_of_Lewis. Here is a challenge for you. Try listing six rail journeys where the price of the high speed ticket is less than or equal to that for classic rail. You will need to follow a few ground rules:
          • Travel should be for the following day (a weekday) departing between 08:00 and 10:00.
          • Each journey should be in a different country.
          • At least 5 of the journeys should include the country’s capital city.
          • The journey duration on the high speed rail should be at least one hour for 5 of the journeys.
          Would you like to report your findings by Wednesday 22nd?

          • @andrew bodman – your challenge is rather strange. There was no suggestion that there are any rail journeys where the price of the high speed ticket is less than or equal to that for classic rail. Please re-read my post.

            From Rome to Florence the cheapest basic off-peak fare appears to be 19.25 euro for a 3hr 35 minute journey. The high speed train takes 1 hour 30 minutes but costs 43 euros. For about 280 km this is from about 5.4p/km going up to 12 p/km paying the high speed premium. Compare this to GB fares where off-peak London Manchester is £73 or 24 p/km over a distance of about 300 km in 2 hours 7 minutes. The Italian fares are so cheap that even with a 100%+ premium the high speed train is still cheap by our standards.

            For Madrid to Barcelona, 386 km, a basic off peak is 54.6 euros if you have 9 hours to spare at 11p/km or pay 118 euros for the high speed train in 3 hours for 118 euros which works out at about 24 p/km. London Glasgow off-peak, about 400 km, works out at about 30 p/km for a 4 hour 30 minute journey.

            The point is that the European examples are distorted by the often high subsidies on the basic ‘classic’ services – the simplest conclusion is perhaps that, while there is always a fare premium for high speed, it is determined by local conditions and that in this minefield the HS1 premium is the only really relevant and credible example for analysing HS2 .

      • Most railways, high speed or not receive a subsidy, so what? I subsidise schools, hospitals, motorways, nuclear power, wind power, etc. The fact is all infrastructure has to receive subsidy at some stage and extra rail capacity is urgently needed. Nobody has come up with a better way of providing it.

        • I don’t think Graham that the question is whether we should be subsidising railways or not, it is whether we should subsidise HS2 more than a conventional railway to avoid charging higher fares than a conventional railway. Since HS2 trains will cost more to run per kilometer than conventional trains, for the same load factor either fares will have to be higher or the subsidy will have to be higher. Since the main advantage being claimed for HS2 is to reduce crowding, I don’t see that this situation can be avoided by hoping to run HS2 at a higher load factor than is typical at present.
          The DfT has said that its wants to reduce the subsidy, which is currently running at about 150% of the passenger contribution to costs. HS2 is hardly going to help the Government achieve this aim, unless fares reflect the higher costs. Also there is a moral argument here. Less than 10% of the total passenger kilometers travelled in Great Britain are on a train and train users are largely the better off. Perhaps in view of this the Government is right to want to reduce rail subsidies?

          • hs2 like all high speed rail services is faster and more convenient then slower trains and indeed short haul flights so why should it not attract a higher fare ? and if a rail company can increase its revenue by cutting prices to attract custom they will obviously do so. it is a fine balance between the number of passengers you can carry versus the level of pricing. and as has already been said the massive capacity of hs2 means that there is scope for some relatively cheap pricing. what holds pricing up is lack of capacity. i strongly suspect that we will not see the average 6.2 % increase in january by the way as the inflation rate is much higher then was anticipated when this 3% plus inflation policy was implemented

            also stophs2 want to complain that hs2 will require too much subsidy whatever that means but then also complain about higher ticket prices ! no one will be forced to use hs2 if youn wish or indeed cannot afford to use hs2 you can still travel to the same places more less expensively by train as long as you are willing to travel on a slower train which may be less comfortable. or you could fly or drive but i cant even imagine what these may cost in 14 years time !

            • You are right Nick, the only sensible model is that HS2 will attract a price premium and an alternative, slower and cheaper, service will continue to be offered on WCML. This is what we have at present on Birmingham to London, where passengers have the choice of Virgin Trains and the cheaper, but slightly slower, Chiltern Railways.
              This is also what the Commons Public Accounts Committee (PAC) sees as the likely scenario. The problem is that the HS2 business plan assumes that there will be no price premium for travelling on HS2 and this was criticised by the PAC. This is just one of a number of “simplyfying assumptions” made by DfT/HS2 Ltd that favour the HS2 business case.

          • Since HS2 trains will cost more to run per kilometer than conventional trains, for the same load factor either fares will have to be higher or the subsidy will have to be higher.

            Nice attempt to deceive Peter – you know very well that the load factors on HS2 trainsets are planned to be much higher than their classic line counterparts. HS2 trainsets will routinely carry up to 1000 passengers, compared with 439 seats on the new 11 car Pendolino trainsets now just entering service on the West Coast Mainline

            Let’s also not forget that only a new line constructed to Continental GC loading gauge can facilitate the operation of double-decker trains

            • Sorry Peter, I don’t get the point that you are making. If you double the number of seats on a service, for the same passenger demand the load factor is halved. So I don’t see how running 1,000 seat trains on HS2 will lead to higher load factors.
              By the way, I think that the introduction of 400 metre train sets is probably something that we will not see for many years. I’m sure that the 200 metre versions will be more than adequate for the first few years.
              And I truely was not trying to deceive anyone. I was just trying to make a like for like comparison, and as load factor is obviously linked to revenue it seemed appropriate to add the qualification about load factors.

  2. I pointed this out in my response to the main HS2 consultation – in every other situation, an “improvement” to the rail network that can be used to justify a fare rise, is used to justify a fare rise. So why not with HS2?

    As we are seeing this week, this happens with capacity enhancement schemes and electrification, where benefits to passengers are recouped by raising fares (BR had been doing this since at least the 1980s, so it’s not new, and in fact comes from BR’s Passenger Demand Forecasting Handbook, which is still in use and kept up to date). For projects on Network Rail (and back to BR), these higher fares are used to pay for the project, and people will be prepared to pay more for faster travel, better trains or less overcrowding or delays. On that basis, people should be happy to pay much higher fares in order to travel on HS2, and indeed the lower fares on the classic line are seen as a justification for keeping the slower classic services via intermediate towns, which might not justify the current frequencies once all the long distance passengers are on HS2… how did they manage to tie themselves up in knots like this (I have my own theory on that)

    • The average rail fare increase in January 2013 will be 6.2% and is calculated as RPI for July 2012 plus 3%. However some fares could rise by up to 11.2%

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