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Go-Ahead fares up as commuter boom ends
Robert Lea16 Dec 2008
The boom on the commuter railways that come into the capital from the south is ending just as City workers are about to be hit with the biggest fare rises in years.
Go-Ahead Group, the company which runs Southeastern and Southern Railways, admitted today growth rates on its commuter trains have dropped sharply in recent months.
Other operators, notably South West Trains and Virgin Trains group Stagecoach, have warned that fewer passengers means lower profits going into next year.
Go-Ahead, however, said today it expects to hit the City's targets on its profits because it expects to offset any decline in passenger growth with inflation-busting increases for commuters of up to 8% on fares.
Southeastern and Southern Railways, which deliver commuters into and out of London Bridge, Cannon Street, Charing Cross and Victoria, had previously reported passenger numbers growth in the year to the end of last June of between 6% and 7%, enabling it to post revenue growth in excess of 13%.
That is now running in single digits as it reported that for the six months to the end of December revenue growth is at or below 10% with the October-November-December quarter coming in weaker than the previous three months.
That has been put down to the number of job losses in the City already running at toward 100,000. However, those still commuting come January are to be hit with fare rises of 8% on Southeastern and 6% on Southern. The annual rises are calculated, respectively, on a formula of 3% and 1% over the Retail Prices Index in the previous July, when this year the rate of inflation was running away at 5%.
Go-Ahead chief executive Keith Ludeman said there was no mechanism by which the fare rise can be lessened. "We run a regulated railway where the fares are regulated and where they go up only once a year," he said.
Worst affected of Go-Ahead's services is the Gatwick Express, which has been hit by falling air passenger volumes on the back of airline failures and route closures at London's second airport.
Go-Ahead reported a writedown of £40 million in its aviation business. It is valued at £25 million compared with the £80 million it paid for it in 2001.
Reader views (14)
British Rail, British Gas, The Water Board - the good old days.
- Frederick, London UK, 17/12/2008 09:12
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You can always go here and live in London!
- Jacqueline, Hampstead, London, 16/12/2008 20:16
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When there were many commuters to lower prices make the service efficient and profitable cost wise/passenger they now increase due to lack of custom. We commuter cannot win in good times and bad. It seems transport companies always want to make a fast buck to maintain their salaries and bonuses above inflation, their companies profits for shareholders and their final pensions. I wish there was something we could do to stop this escalating ongoing robbery.
- Peter Noterfed, Paris, France, 16/12/2008 18:53
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Privatization has failed. Nationalize.
- Mick, London, England, 16/12/2008 16:42
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The answer is to create more local jobs for local people to stop the commute; and more tower blocks in London to house the workers with cheap, realistic accomodation. End these dormitory commuter towns now.
- Dhanraj, Basildon Essex, 16/12/2008 14:00
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"... fewer passengers means lower profits ..." - These people are brilliant!
Oh well, price hikes all round then. By the way it didn't matter whether passenger numbers were down or not, the huge price hikes were going to happen anyway. Thieving b*stards.
- Frank, Home Counties, England, 16/12/2008 13:44
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All commuter trains into and out of London and standing room only.
If the train companies cannot make a profit, then the business model must be wrong. ie, train travel should be not-for-profit - despite the shakeup in banking, London still needs to attract good people to work here, and having a crappy, expensive train service is not going go help.
- Tim, London, 16/12/2008 13:31
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As an ex employee of go via i can confirm as most people would have guessed that the firm are only intrested in your £££££ ,They are not intrested in passenger/ staff safety as it costs to much money they want a quite life with no bad press so that the shareholders can rub their greedy corparate hands with glee with no concern to anyone else at least the fat cats of go ahead will have a good xmas at everyone elses expense , hopefully the reccession will hit them where it hurts in their pockets .
Merry Xmas Everybody
- George, Bexhill UK, 16/12/2008 13:29
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WHy do people go live so far away anyhow?
- Georgie, Islington, London, 16/12/2008 12:39
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Maggie, nice try but rail travel is VAT exempt.
- Jon, London, 16/12/2008 12:20
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Hopefully the 8% pay rise I'll be copping from Southern next year will allow them to run their trains to some semblance of a timetable, especially seeing as my train has arrived at it's destination on time once in the last 3 months.
- Bob, Cheam, 16/12/2008 12:03
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Rip-off rail prices, losing jobs, are forcing people off the trains we have no money for these increases. Cut the fat cat salaries paid to the bosses. Try reducing the fares vat has come down.
- Maggie, London, 16/12/2008 11:18
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Why do profits HAVE to go up year on year? Why can't the railway companies be satisfied with same profit year on year? Their business model means that inevitably fares will one day be totally unaffordable. The higher the fares, the less people use the service, which in the present model means that those remaining passengers are expected to foot the bill for the shortfall. It is quite absurd.
- Paul Mc Donald, London UK, 16/12/2008 11:14
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Putting prices up to world beating levels will only accelerate the decline in rail travel (or is that the idea, less investment subsidies?)
Pity the commuters using SouthEastern who are going to have to pay for the empty new fast trains.
- Paul, London, 16/12/2008 10:44
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