Rip-off Railways?

As has been widely reported, train prices have again risen at an above-inflation rate. Some prices have risen by as much as 9% and walk-on prices are now staggeringly expensive - the most reported price being £202 for an open return from London to Manchester. You can read more about the rises here: http://www.timesonline.co.uk/article/0,,1-1916219,00.html

The quality and, in particular, cost of rail travel is a real bugbear of mine. Like many people, I love to travel by train... in principle. The idea of rolling across open countryside reading my book or gazing out of the window is fantastic - reminiscent of abygonee age. On a train you're travelling with Miss Marple, Cary Grant and Eva Marie Saint - or so Virgin's advert tells us. Sadly though you are more likely to be crammed in with a group of people listening to their iPods at ear-shredding volume while eating a £5 muffin off a dirty table. So how, I often wonder, can the train operators justify such prices?

In marketing, value for money can be displayed on a 3x3 matrix (marketeers love matrices because they make us feel all scientific). Value for money must incorporate both of those points - value and money. An Aston Martin costs a lot, but its perceived quality is high too - so it is priced at the Premium level.

Note that the matrix refers to "perceived" quality. This is important - how customers perceive the quality is the vital thing, not what the company selling it thinks.

So what is the perceived quality of the railways? I guess that is a rhetorical question really. No matter what the train operators tell us about improved performance etc., most people in the UK think we have a pretty lousy system. Survey after survey shows that passengers are fed up with dirty stations, over-crowded trains and delays. Traipunctualityty in 2004/5 was worse than it was in 1998, yet companies boast about how well they are doing. Passengers are clearly not impressed.

The perceived quality of our railway system is low... but I suppose it could be worse!

Is getting the train really that expensive? Surely the London-Manchester example is just a blip that has been discovered? Well I checked out another journey - London-Glasgow. A walk-on open return costs a mere £222. Seems reasonable...

The standard response is that passengers should book in advance. Possibly so, and journeys are then a lot cheaper. I looked at booking the same trip in a month's time and it drops to £65 which doesn't seem too bad. However, pricing can never be taken in isolation. What does it cost compared to the competition.

In this case the competition is driving or flying. Let's take driving first - the return trip is 814 miles which will cost £407 at a 50p per mile rate. Add onto that the stress of driving so far, inevitable traffic jams and the inability to work on the journey, then the train comes out well.

However, the train does not do so well against flying. Booking an EasyJet flight today would cost £170 including taxes. That is £52 less than the train. Booking in advance will cost £36 - nearly half price at £29 less than the train. In addition, rather than the 7 hour trip each way it only takes around an hour.

The train is clearly too expensive for what you get. The real competition these days is flying and the train costs more and delivers less. At best, the railway's pricing strategy is "Unhappy Customers." At worst it is "Hit & Run" - not exactly a term one wishes to associate with Britain's once proud railways.

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