Whose Class?

Apr 15th, 2011 | Filed under Politics

For any given First Class seat, the financial viability for the operator of First Class Rail depends upon the following (entirely made up) formula:

Fbenefit = (Fcap / Scap) x (Fprice / Sprice)

That is to say, from a pure cost point of view, you need to be charging sufficiently more for each seat to compensate for the fact that there’s a lower passenger density in that carriage.

So if Standard costs £10 and First costs £20, then you will break even if you have at least half as many First Class seats as you could fit Standard Class seats in. So, for example, a BR Class 444 (which is what I take in the mornings) moves from 2+2 to 2+1 seating, which immediately results in a drop in capacity of 25%. Factor in the increased leg room, and you broadly break even, comparing a full price Standard ticket against the equivalent First Class.

What this means is that, at rush hour, the railway companies are happy to make roughly the same amount of money, just by selling fewer tickets but at a higher price. Is this really how we want to be running our public transport network? Same financials, but fewer people?

But okay, let’s cut them some slack – what if this actually brings in more money for the operator? At least somebody benefits, right? Well, no, not really. Again thinking about rush hour, when capacity is stretched, the First Class section basically allows one set of customers to prevent a number of other prospective customers from boarding the train, by slipping the train operator some extra money in exchange for a bit more leg room. So First Class carriages allow the operator to make more money, while carrying fewer passengers.

Well fine, but what if they’re not profiting at all? Y’know, what if actually, they’re putting on a customer service, but actually it doesn’t pull in any additional revenue? What if they lose money by satisfying those customers who want to travel in First Class, at least they’re not being greedy, right..? Except now we have fewer customers using public transport and less revenue.

So no matter which way I look at it, however you balance that formula, I just don’t see a way that justifies First Class travel. It creates diminished capacity, and no matter which way you skew the financials, that can’t be justified on a public transport system.

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