Published February 17th, 2024
In case you missed it, LNER recently launched the next stage of the long running programme of fares simplification.
Perhaps unsurprisingly, the changes have received quite a negative reaction, focusing on the scenarios where customers will lose flexibility, or pay more. Commentators are either calling for the trial to be scrapped, or for the old fares to be maintained in parallel as an additional choice for customers.
I’ve no particular skin in this project – but having worked on previous fares change initiatives, I recognise the challenges, so rather than take the populist rail bashing stance, I’ll stick my head above the parapet and try to offer some more balanced thoughts.
Is there a need for fares simplification?
I think there is a broad consensus at this point. Whilst some retail apps might do their best to hide the complexity from end-users, it’s hard to mask completely, and has impacts in other ways too. A well-known issue being the overcrowding on the first and last train of the off-peak period, vs lightly loaded last/first train within peak.
What is the pilot?
The pilot is between Edinburgh/Berwick/Newcastle and London. It replaces the current fares with three new fares:
- Fixed – travel on the booked train only
- Semi-Flexible – travel on the booked train, or any train +/- 70 minutes to booked time
- Fully-Flexible – travel on the booked train, or any train up to 2 days from booked time
How does this differ from today?
In case you’ve missed the commentary elsewhere – most of the objections to the trial focus on the removal of the “Super-Off-Peak” fare, and replacing it with the “Semi-flex” fare. So, let’s compare the two:
It’s worth noting that this builds upon previous changes such that all fares can be booked up until 5 minutes before boarding (subject to availability), and all fares are sold as singles.
LNER graphic showing how fares will have evolved since the start of the simplification programme
What is ‘wrong’ with the approach being trialled?
The main objections are:
- Concerns that this a way of increasing cost of the journeys. There is no longer a single off-peak fare that is always available at off-peak times. Therefore, there are concerns that LNER could limit the availability of the cheaper “Fixed” and “Semi-Flexible” tickets to drive people to higher priced variants, or all the way to the “Fully-Flexible” fare.
- Concerns that those people not planning in advance, particularly those unable to, will pay more, as there is no guarantee that Semi-Flexible will be available on the day.
- Concerns that the Semi-Flexible ticket is not refundable.
There is also some inaccurate reporting, such as stating that the only fares available on the day will be the higher-priced “Fully Flexible” tickets. This might be the case by exception, but the general expectation is that all three products will be available to book on the day of travel.
Why not keep the Super-Off-Peak as well?
Some commentators and consumer groups are calling for the Super-Off-Peak fare to be retained alongside the new fares structure.
Ironically, this is exactly how fares complexity breeds. The industry keeps adding new fares, but not retiring the old ones (often due to Political pressure), creating ever more “choice” for customers. But the reality is that “choice” is complexity.
Do it, or ditch it, but doing both is just adding complexity.
Be receptive to different ways to address concerns
That’s not to say that there are not attributes of the Super-Off-Peak that we should seek to preserve – but let’s get back to the underlying issue and protect that, rather than simply call to retain Super-Off-Peak.
For example, if we are concerned that this will make on-the-day travel unaffordable, you could regulate that. The DfT could for example mandate that 10% of capacity must be available on-the-day at no greater than a regulated price point.
If we are concerned about the need for refundability, you could follow the model that many hotels offer where a simple £10 supplement at the time of booking allows flexibility to cancel until the night before.
Fare level vs fare complexity
A lot of the commentary around changes to fares structure ends up inextricably linked to the cost regardless of structure. I think it’s important to separate out cost, as ultimately that is broadly a political issue for deciding on the taxpayer / fare-payer balance.
That said, initiatives that support the ability to better spread demand over the day should make better use of the railway, allow fewer empty seats overall, and therefore meet Government revenue targets from lower average fares.
Rose tinted spectacles?
If you were reading many of the objections to the pilot, advocating the retention of the Super-Off-Peak ticket, you’d be mistaken for thinking that this was the utopian product that it would be heresy to remove. But let’s pause on that for a minute:
Off-Peak and Super-Off-Peak fares have over 100 different definitions of when they are valid. The definition of “super-off-peak” used previously by LNER had 50 sub-restrictions depending upon origin station. They are frequently the cause of genuine misunderstanding where a customer thinks the ticket is valid on a train it is not, and has to pay the difference to an Anytime fare.
In my 20+ years of retail, and various trips accompanying train guards on ticket inspections, it is clear to me that customers understand the value proposition of both (a) train specific products, (b) fully flexible tickets. The confusion arises with the semi-flexible tickets: certain times only, on certain days of the week only, except in August, via this location, but only on this operator, unless your journey started west of Swindon, etc.
We should not lose sight of what LNER is creating here is three fares that a customer can understand without reference to a bible of restriction codes, and with no knowledge of a myriad of different peak/off-peak times.
It's not all bad
It’s also worth calling out that the “Semi-Flexible” ticket has some benefits to the Super-Off-Peak. The most notable being the Super-Off-Peak was only valid in defined off-peak times. If you were unsure whether you would catch the 6pm or the 7pm train, previously you had to buy the most expensive “Anytime” ticket, or resign yourself to sitting around the station for an hour waiting for your booked train. Now you can book a "Semi-Flexible" for the 7pm train, and catch the 6pm if you arrive early.
Guaranteed seat, low fares, full flexibility
Unfortunately, you can’t guarantee all three in a system with fixed capacity.
There are a lot of advocates of the so called “walk-up railway” who strongly believe in protecting the right to buy a ticket and turn-up and board any train at any time. Indeed, that’s an essential part of short/mid-distance rail. For long-distance rail however, that’s much more a double-edged sword. Anyone that’s worked on the frontline will know the problems caused when more people buy tickets than there are seats available. Customers themselves even complain – “why did you sell me a ticket when you knew the train was going to be full?” No one wants to be standing the whole way from London to Edinburgh, nor do people want to be seated in a train that’s so full they cannot access the toilets or get refreshments. Who gets on the train becomes a battle of who has the biggest elbows and fewest manners – certainly not a place you want to be trying to travel with a young family.
Walk-up has a role, but it is increasingly a niche role in long-distance. The railway should not be routinely selling more tickets than there are seats available.
No one is proposing this solution for short-distance journeys
It is worth being very clear that the proposals being trialled on LNER are specifically targeting long-distance rail journeys. I don’t hear anyone in LNER, DfT, or GBR proposing that this would be the structure for short distance journeys. There, the need for flexibility and ‘turn up and go’ is much more part of the mainstream need.
The inflexion point for mid-distance journeys will need careful navigation.
You’ve heard you can avoid the new fares with split ticketing or buying a ticket to Haymarket?
It’s a trial – so it only covers those specific routes and it’s only on LNER services, which create some anomalies with routes not included in the trial. We should distinguish between issues arising from the scope of the trial, and issues relating to the concept being trialled.
In summary
The concept being trialled may not be perfect, but personally I believe we should give the trial a fair go.
Inevitably things will need to be refined, both in the proposition, and how the fare setting is regulated in the new structure. But, personally I believe this structure has the chance of being one that can work for the better, and therefore should be given the benefit of the doubt.
There have long been calls for simplification - and this structure is simple. Three products, that can be understood by customers without reference to any other sets of restrictions.
If the trial proves that wrong, then sobeit – the trial has served its purpose and we can write-off this idea from an informed position.