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Rail industry nets £3bn from discounted tickets – ORR

Discounted rail tickets accounted for £3bn in rail revenue and over 40% of all income from passenger fares in 2012-13, new data from the Office of Rail Regulation (ORR) has revealed. 

This mirrors findings from ATOC, which says Advance tickets – cheaper but less flexible than walk-on tickets – are a key factor in the steep growth in rail passenger numbers in recent years. 

Key findings of the ORR’s ‘GB rail industry financials information 2012-13' report highlighted that total income from passenger fares rose by 3.6% to £7.7bn, compared to 2011-12. This was largely due to more passenger journeys on the network. 

Additionally, it revealed that the cost of running Britain’s railways was £12.3bn in 2012-13. This overall cost has remained consistent over the past three years. 

However, the ORR concluded that by taking into account passenger growth, the industry’s cost, for every kilometre a passenger travels, has fallen (down by 6.2% since 2010-11). 

There are also variations in the level of government funding between England, Scotland and Wales. Total funding varied from £2.19 per passenger journey in England, to £7.60 per journey in Scotland, and £9.33 per journey in Wales. 

Richard Price, ORR chief executive, said: “Britain’s rail industry receives substantial income from passengers and taxpayers. People have a right to know where the money goes and what it helps deliver. 

“Passengers are increasingly the main funder of the railways, and must be central to developing its plans for the future. ORR is working to put passengers at the heart of the railways – working with the industry to ensure passenger groups have a greater say in plans and delivery of new enhancements to the rail network; to review the quality of information provided to passengers during the recent disruptions; and to establish a code of practice on rail ticket selling.” 

The report also assesses financial trends over the past three years, during which time the rail industry has achieved high levels of growth as passenger journeys have increased by 10.4% and the amount of freight carried on the network has risen by 29.7%. 

Michael Roberts, director general of the Rail Delivery Group, which speaks on behalf of the rail industry, said: “The ORR’s report shines a light on why Britain’s railway is such a big success story. An industry focused on attracting more passengers and freight, combined with a commitment by successive governments to invest over the long term, is generating phenomenal growth. 

“This winning formula is helping to reduce unit costs while improving and expanding a vital public service,” he said. 

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