Home Rail News Four square rail arithmetic

Four square rail arithmetic

Rail operators are generating more than four times as much money for Government to reinvest in rail than 15 years earlier, according to a report, ‘Growth and Prosperity,’ published by ATOC.

The startling report is based on data analysed and collated by KPMG. By significantly growing passenger revenue while containing costs, wily train operators have increased the money they generate for Government to reinvest from £400 million in 1997-98 to £1.7 billion in 2011-12.

This money is helping to reduce public subsidies and sustain the biggest investment programme seen in railways in decades. At the same time, the operating margins of train companies have remained modest, most recently on average around 3% of turnover.

The key factor driving the £3.2 billion increase in passenger revenue has been the phenomenal rise in passenger journeys. 96% of the increase in revenue has come from passenger journey growth, as opposed to 4% from fare changes. The report has the backing of the Rail Delivery Group.

Says Tim O’Toole, CEO of FirstGroup plc and Rail Delivery Group Chairman, ‘By working in partnership with Government, Network Rail and the rest of the industry, franchised train companies will continue to strive for a bigger and better railway. This is not simply because encouraging more people to travel by rail is good for our business, but because it is vital for the future of the economy and the country.’

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