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Viewing report
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Rail Travel Market Report 2011
Key Note Publications Ltd, July 2011, Pages: 141
Total passenger receipts for UK rail travel amounted to £8.96bn in 2010, a 34.3% increase on the £6.67bn generated in 2006. However, this represents only 3.4% growth over 2009 revenue levels (£8.66bn) and demonstrates a slowdown in growth seen in all rail sectors apart from international travel. The total number of passenger journeys actually declined in 2010 by 1.9% to 2.54 billion; therefore, receipt revenue growth is primarily a result of increased rail prices.
Rail travel in the UK can be split into various sectors that serve different markets and passenger needs. The train operating companies (TOCs) predominantly operate on the National Rail network. This sector represents 69% of the total ticket revenue, although revenue in 2009 saw reduced growth and a decline in passenger journeys. Urban rail systems include the London Undergound, a transport network that accounts for 89% of the sector’s revenue. Overall, urban rail represents 20.5% of total UK rail travel revenue. After a poor 2009, when passenger revenue declined by 3.7%, international rail travel (Eurostar and Eurotunnel Shuttle) grew in value by 12.1% in 2010. This was the only UK rail sector to buck the trend and post increased levels of growth.
Although passengers still require rail services to commute, the recession has reduced the number of people travelling for leisure purposes. This has impacted most on urban rail providers, with people less willing to head into towns for shopping trips and days out. Price increases on services provided by the TOCs have helped maintain National Rail network revenues. International rail travel — particularly Eurotunnel — suffered in 2009, owing to the economic downturn, which resulted in passengers reducing leisure travel and safety issues continuing to effect travel. However, the return to economic stability in 2010 helped the sector return to strong levels of growth.
The McNulty Review, published in 2011, will potentially result in large-scale changes for the UK rail travel industry. As part of the recommendations, the Rail Delivery Group has already been established and is expected to publish a White Paper later in 2011, outlining the future strategy of rail travel. The arrival of Deutsche Bahn to the UK’s high-speed network will increase competition for Eurostar and potentially increase revenue for international rail travel.
The return to economic growth in 2010 and a continued positive outlook, albeit modest, should continue to boost rail travel in the UK. The Olympics provides an opportunity for rail operators — particularly the London Underground and international operators — to boost passenger numbers and revenues. As congestion on the road network increases and cities become less favourable for private cars, rail’s popularity is likely to increase. However, any major changes outlined in the McNulty Review are likely to be met with action from the unions. This will provide passengers with more frustration as the two sides fight over the optimal direction for rail travel in the UK.
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