February 27, 2021

The right track

The UK’s rail network has its challenges but remains crucial to business travel and the domestic economy, writes Dave Richardson

With the franchise system in chaos, grim images of overcrowding, controversy over HS2 and continuing delays to Crossrail, rail has become an ever-present in the national debate.

For business travellers who don’t go by rail or who use it only to commute, the danger is that they don’t see its advantages.

This could change as the climate debate heats up, and duty of care tilts the balance away from long car journeys. “Flight shaming” is beginning to have an impact especially on the travel choices of millennials, suggesting that a new age of rail travel could be approaching – at least when the COVID-19 crisis has finally passed (see pages 58-59 for more on what the government is doing to support the industry at this time).

With improved on-board facilities including better wifi, power points, more seats at tables and faster journey times, many of the new trains currently being delivered will make rail a better experience.

Before temporary reductions in services were implemented due to the spread of coronavirus, seat capacity was increasing on many routes. But while the basics of punct-uality and reliability remain problematic, many potential converts are unconvinced.

“We need new thinking and not talk about the ‘good old days’. We need a forward-looking agenda that recognises how the socio-economic nature of the country has changed”

A solution to rail’s problems is promised by the Williams Review, an independent inquiry into the rail industry that was delivered to the Department for Transport last autumn but had still not been published by early March and now looks likely to be further delayed.

However, its recommendations have been widely flagged up and include scrapping the franchise system as it stands, simplifying fares, finding new ways for train operators and infrastructure operator Network Rail to work together, and establishing a new independent body to draw up contracts with train operators. Predictably, it promises to “put the passenger first”.

Nick Bamford, an associate at consultancy Black Box Partnerships, says: “This is a once-in-a-generation opportunity to change the framework of the rail industry, and an acceptance of its fundamental flaws.

“We need new thinking and not talk of the ‘good old days’. We need a forward-looking agenda that recognises how the socio-economic nature of the UK has changed since the Beeching cuts of the 1960s.”

Open for business

The infamous Dr Richard Beeching, whose report led to the closure of thousands of miles of rail routes, was invoked recently by the Government, which is funding a study into reopening some routes especially in the North. Widespread reopenings would be very costly where the track has been built over, but some have already happened including from Edinburgh to Tweedbank in the Scottish borders, while the East-West rail route between Oxford and Cambridge is now being restored.

Train operators are likely to move towards a simplified fares model based on combin-ations of one-way journeys as a result of the review, potentially making anomalies such as split ticketing unnecessary. But as the rail industry wants this to be revenue neutral, there could be losers as well as winners in the new structure.

David Sykes, Corporate Product Manager of FCM Travel Solutions, says: “Interesting work is being done to try to simplify the current fares system, with single direction pricing on certain LNER routes removing the heavily weighted prices on single tickets.

Any model that simplified the fares and pricing system, and resulted in a better on-board experience, would be welcome.”

Wishful thinking

American Express Global Business Travel (GBT) has a wish-list of what it wants to see from the Williams Review, including a focus on the business traveller as a distinct customer type for new customer-centric services; more standardisation around key products and fares, so it’s easier to sell rail; and contracts that reward operators for investment in the customer experience.

Jason Geall, Vice President and General Manager, Northern Europe for GBT, says: “Ultimately, we hope Williams will fix the long-standing problems in a broken rail industry once and for all, and make it fit for the future. With high-speed on the way, we need Williams to provide the basis for a radical new approach.”

GBT is already working with train operators on issues such as handling delays, with Geall adding: “Travellers want to be sure that if there is disruption they can easily make alternative plans. They need accurate, timely information – and TMCs need access to this information so they can support their travellers with one-click rebooking. Right now, this information is closely guarded by the rail companies –
it needs to be made openly available.”

Customer experience must improve if rail is to benefit from modal shift away from air travel, and GBT says this is starting to happen on rail journeys of up to four hours such as London-Amsterdam and London-Edinburgh routes.

But others have seen little movement yet, and doubt whether this will happen unless it is mandated. “Longer than three hours remains a harder sell, even city centre to city centre, except in some organisations that can mandate it, such as the World Wildlife Fund, or where corporations have sustainability teams that need to lead by example,” says a senior member of the ITM’s industry affairs committee.

The biggest obstacle to rail’s greater share of the business purse is the cost. In Scandinavia – thanks to Greta Thunberg – and in places like Germany, rail is a viable alternative to air travel not just as a mobile office with fast trains, but also because it’s cost effective.

“Operators are likely to move towards a simplified fares model based on combinations of one-way journeys, potentially making split ticketing unnecessary”

The BTA says there is little evidence of modal shift on routes such as London-Edinburgh/Glasgow, where air fares remain competitive. Genuine competition between train operators would help slash fares, but with capacity constraints on the network few expect this to happen.

“Competition would help drive down costs on some of the more expensive routes, and we have seen examples of this with Grand Central, Hull Trains and LNER all competing on some routes,” says Josh Collier, Head of Proposition – Rail & Ground Transportation, for Capita Travel and Events.

“Having options on the West Coast route –which will come in the form of Grand Central starting its new service from Blackpool to Euston in May – and on the Great Western routes would be welcome.”
But Richard Johnson, Senior Director, CWT Solutions Group, says other factors could favour rail even if the costs don’t stack up.

“A challenge faced by managers of corporate travel programmes is going to be the relative lack of competition in the rail sector compared to air, and the resulting lack of price competitiveness,” he says.

“This is where companies need to be thinking about the bigger picture of their investment in corporate travel, and weaving in traveller happiness and responsible business factors too. There is always going to be a compromise between the lowest cost and the best experience or highest level of sustainability.”