RAILWAY ECONOMICS

Railway Economics



Railway Economics

Summative Assignment 1

Target Market

Demographics

2.6 million frequent rail users in the London & South East region use the train 1+ times every month

Four out of every 5 of these passengers are ABC1, with 48% AB

69% use rail for work or business

45% are aged between 25-44 yrs

Mobility

Frequent rail users spend on average 3½ hours each week on trains

1.5m own a car, with 58% driving 6,000 miles or less on average p.a.

1.6m use the London Underground at least once each month

72% have travelled by air in the past 12 months

Affluence

At £28,641, the average frequent rail users personal income is 65% above the national average

39% have a personal income of £30,000+ p.a.

The average family income of frequent rail users is £42,873, 52% above the national average

37% live in a household with a family income of £50,000+ p.a.

Proposal features attaractive to the market

At the NTA's request, Irish Rail has examined the option of significantly increasing the level of service along the route. Their analysis can be summarised as follows: The revised level of service, over a six day week, includes three round services between Waterford and Wellington Bridge, one round service between Waterford and Wexford, one service between Waterford and Wexford returning as a service between Rosslare and Waterford. The total additional cost associated with providing this service is €410,500. The main drivers of the cost increases are associated with an increase in the numbers of gatekeepers (5), signalmen (1) and drivers (1). While additional rolling stock is not needed, greater use will be required from existing units. No provision is included for additional fleet or infrastructure maintenance. A key value for money issue is whether the additional revenue generated by this increased level of service will cover this additional operating cost and make a significant contribution to the annual cost of the current service.

The operating of a lighter rail system along the route is not considered as a viable option either. This would require the acquisition of a dedicated fleet (at least one vehicle) which in turn would require its own maintenance arrangements. In addition, there would still be a requirement to provide for signalling and crossing personnel. These are the major driving costs of a rail service. Notwithstanding the case put forward by Irish Rail above, the NTA carried an analysis of potential demand within the rail cathcment. Rail based development is generally aimed at consolidating development in close proximity to a station to improve accessibility for those travelling to and from the area by rail.

b) Forecasting Demand

The targets set out in the Government's Transport Policy Smarter Travel - A New Transport Policy for Ireland, place a greater obligation on urban areas to effect a substantial shift away from the use of the private car to other modes. This change in travel behaviour has a greater potential to occur in larger towns and cities than in smaller towns, villages and rural areas. This is in part, due to the greater prevalence or potential for ...