Grand Central Suck - It's Official

[Parkey]

You're making the same assumption as the Conservatives made in the 1990s. Surely it can't be efficient if it's a state sector monopoly with no competition. Privatisation happened because of that assumption; that blind idealistic approach. The current situation with costs somewhere between 3x and 5x what they were under BR shows just how efficient BR actually was.

Yes there have been new trains introduced since privatisation. Guess what, there were new trains introduced before privatisation too. Following the pre-privatisation trends there's no reason to think that the same investment (which, to be honest has nearly all come from the taxpayer) wouldn't have happened under a nationalised railway.

As for innovation. BR used to have an R&D facility and were world leaders in railway research. This went the way of the Dodo when BR was broken up. Under the present structure the private operators can't really innovate because anything they might decide to do gets bound up in DfT red tape.

The recent surge in passenger numbers can be attributed to many things including a strong economy, congestion on the roads and rising fuel prices, it's not necessarily because of improvements to the level of service on the railways.

I'm not just being nostalgic here. I used to like the privatised system too, but then I decided to go and read a bit more about it. My advice is don't do it, it's depressing.

[Ameecher]

For once Parkey, I agree with you.

[teccuk]

I also agree. If anything it proves that the system does NOT work as envisaged. Only the monopolies can do well, smaller operators looking for a gap in the market will be squeezed out.

[JamieLei]

Smaller companies who look for the wrong gap are squeezed out. If they look for the right gap, they flourish. Compare Grand Central and Hull Trains. And the monopolies only do well because they're protected by law and franchising agreements!

[Dave]

Smaller companies who look for the wrong gap are squeezed out. If they look for the right gap, they flourish. Compare Grand Central and Hull Trains. And the monopolies only do well because they're protected by law and franchising agreements!

See ownership of Grand Central, then see ownership of Hull Trains. Also compare routes.

[JamieLei]

See ownership of Grand Central, then see ownership of Hull Trains. Also compare routes.

There are many reasons why Hull Trains are successful and Grand Central failed:

1 - There's a bigger market for people who want to travel to Hull. Grantham is a very well used commuter town. On the other side, who wants to travel to Sunderland? Despite a non stop journey, almost all NXEC services are actually faster from York to Kings Cross, giving faster journey times.

2 - Grand Central use 8 coaches plus 2 power cars, resulting in very high costs. Hull trains (not the 86) use 4 car DEMUs which are much cheaper to run and more suitable for the passenger loads.

3 - Yes, a major factor of the operation is FirstGroup's 80% stake in Hull Trains, but if they owned Grand Central outright, not even plastering the HSTs in pink, purple and blue would make them profitable. Remember that the trains run for 46% their journey time stop-start between Sunderland and York, which wastes more fuel that cruising at speed, and with fewer passengers at the York-London section.

4 - Grand Central simply looked for the wrong gap in the fares market when it introduced its plain-vanilla one-price-fits-all fare - possibly the crucial determinant of success. There's a reason why every other TOC (inc Northen?) has Advance fares - they don't employ Price Discrimination and Advance fares cause they feel like it - it's because it leads to Profit Maximisation. Grand Central should have realised this and are loosing out on heavily because of it.

Observers note that GCs HST sets are reasonable well loaded in the Peak, but near empty Off Peak. There are two markets - Commuter/Business and Leisure. GC do very well in the Business sector, due to lower* walk-up fares. However, they do pitifully in the Leisure sector due to higher* fares resulting in empty trains that drain profits out of the moneymaking Peak services. GC have failed to tap into the Leisure market which NXEC do ever so well. I'm sure Kevin could back this up with some economic theory.

*In comparison with NXEC services that depart around the same time.

[Dave]

I'm afraid most of your argument centred around the difference in routes.

I'm sure I said "also compare routes".

The fact is that First Hull Trains comes from a background of a well established (no matter how bad) TOC.

But I will say this to each question:

1. Where's your proof for this? I'd rather suggest Hull is more of a dump than Sunderland.

2. This point is about right.

3. Several services stop start before going non-stop London. See Chiltern's services from Kidderminster.

One of them calls at 10 stations in thirty minutes then 7 stations in the next two hours. Of course it's doable. The first of the day calls at the usual 8 stations (not Blakedown, Hagley, Lye, Old Hill, Langley Green or Jewellery Quarter) to Birmingham Moor Street, then calls at Solihull, Dorridge, Warwick Parkway, Leamington Spa and Banbury before going non-stop London. It's on a smaller scale but still clearly works.

4. This is clearly an issue, but whether it leads to the heavy losses that you're suggesting is questionable.

I'm afraid that GC were kidding themselves if they felt they could attract the leisure market.

[Ameecher]

2. This point is about right.

Jamie isn't actually right with this one. GC do NOT use 2+8 configuration, they use 2+6.
Also, they did try and get class 222s for their service but Bombardier refused to open the production line for such a small run of units. It's not like they planned to use the more expensive stock all along...

Also the fact that Hull trains are owned by First Group is fairly irrelevant to this matter though, I feel. Why? Because First only took over the operation of HT when HT were already a well established business and HT came as part of the package when they bought out GB Railways (by buying GB railways they got another stab at the Greater Anglia franchise bid), they have essentially done nothing to the service that wasn't already there under GBR ownership. However, the original ownership is important.
Hull Trains being owned by GB Railways was definitely an advantage. Look at their opening services, they were operated by Anglia Railways 170s! Some of the staff were Anglia staff. The had many advantages to being owned by a company that was already successfully in the railway business.
Grand Central, on the other hand, no matter who they bring in, just don't have that experience and will therefore suffer, if only initially. Sure they've had a rough start and you're being unfair in your comparison (Jamie, that is) by comparing Grand Central with Hull Trains with them both in their present incarnations.
Firstly, your note about timings with NXEC getting more favourable timings. Of course they will, they are the franchise holder for the ECML after all, any other services have to be incorporated around their services which will (obviously) get the prime timings. I suspect GC are now getting a better deal than HT got when they started up because at least GC's stock actually goes at 125mph unlike the turbostars that were limited to 100mph and just couldn't compete well enough with the 125mph stock operating on the duplicated part of the route.
Secondly on timings, the GC timings are based on the December 2007 timetable and because it was unclear when GC were eventually going to have stock available they had to be fitted in around the franchise operations. The December 2008 timetable may rectify this a little (although I haven't seen how the TT change will affect open access operators except that HT get an extra path) but ultimately GC aren't going to get anything new until the EC route utilisations strategy is actually implemented which will see freight diverted onto the former Great Northern route and infrastructure improvements on the mainline allowing more paths on the mainline for operators to compete for (including NXEC with their plans to run to Harrogate and wherever else).

[JamieLei]

1. Where's your proof for this? I'd rather suggest Hull is more of a dump than Sunderland.

Hull Population: 216,000.
Sunderland Population: 134,000.

Hull is closer to London than Sunderland - hence more London commuters are liable to move to the area. Sadly I can't find anything about household income levels although unemployment seems about the same.

4. This is clearly an issue, but whether it leads to the heavy losses that you're suggesting is questionable.

If all 3 HST sets were working (ie: 2 in operation), there would be 3 return journeys between Sunderland and London. Of these, I'm guessing only 2 single journeys are business-orientated - the two named trains (0641 from Sunderland and the 1650 from London). There's a lack of demand for people who live in London and work in York, unless it's for leisure. This means that while 2 journeys are profitable, the other 4 are draining the profits out of it, resulting in an overall loss. If you've ever played the web-based TOC game, you'll know how furiously difficult it is to make a profit in the off-peak without lowering your fares dramatically.

Chiltern really heavily promote Birmingham to Londoners as many of the return workings are far emptier than the outgoing ones. I noticed that the evening trains (that should be full of Londoners returning home) were much emptier than the morning trains (which are packed with Leisure travellers).

I doubt that many TOCs make that much money off leisure travellers, but it's vital to fill them to stop those off-peak trains from losing money.

However, the original ownership is important.

If you look at GC's board of directors, 5/6 of them came from very high railway positions (Managing board of Virgin, Prism Rail, Valley Lines, Frasier Eagle, Network Rail) so I doubt there's a lack of expertise. However, the way they went about it, especially with regards to ticketing and routes completely failed.

[Kevo00]

With regard to the point about GC having no previous experience as a start up - I'm sure they must have employed consultants in their planning phase, and the whole point about employing consultants is that they spy on other businesses and tell you what they do well, so that you can copy them.

As for the off-peak and on-peak issue, its an issue of marginal cost. The cost of having one more passenger is effectively the same because the train doesn't get much heavier (although I have seen some very fat Sunderland fans!) so its better to sell the seats, even at a very low price, just so that they create contribution to profit even if they don't make a profit in themselves. If your seats are all full, then there are more people to buy stuff from the trolley too.

GC could also have created some extra income by undercutting Northern on Sunderland-Eaglescliffe-York journeys, where the ticket prices are probably quite high nowadays. It seems to me that GC have based their model on 'all the way' journeys, when the numbers of those are relatively low - and even in all the way journeys, its probably cheaper for the average Sunderlander to book a NXEC off-peak service (you can get about £25 return if you book really early), and take the bus to Durham or the Metro/Northern to Newcastle to catch it. Might be quicker too!

[Ameecher]

What I'm saying is that being operated by a previously (well-) established company certainly gives you a bit more leverage, I would have thought rather than a company turning up and saying, "can we run a train please?" without any track record on having run trains (even though their management themselves may).

[orudge]

And announced today, we have First ScotRail reintroducing push-pull Mk2 onto the Fife Circle line

How very interesting, my half brother is in that clip.

[Dave]

That has one of the longest threads on WNXX.

[Griff]

And announced today, we have First ScotRail reintroducing push-pull Mk2 onto the Fife Circle line

How very interesting, my half brother is in that clip.

Was he the one wearing the black tie?

[orudge]

Indeed, 47 seconds in - a bit of a surprise when I was watching it, for sure!