In line with rail companies across the UK, peak fares for travel on London Midland services increased on 2 January 2013. However, car park prices and most off-peak fares remained unchanged.
No one likes paying more for their train travel, which is why we have kept increases to a minimum, with prices rising by an average of 2.8%, somewhat lower than the national average of 3.9%.
You can find an explanation of rail fares and how rail companies are performing here.
Why do fares have to increase?
Continuing the investment in the rail network will help to deliver more trains, better stations and faster services. To fund this there are two main sources of income: taxes and fares.
The income from fares covers around 60-65% of the cost of running the rail network and since 2004, successive governments have decided that the people who use the railway should contribute a higher proportion of the running costs than general taxpayers. To achieve this, the government regulates around half of all fares (generally those for peak time commuter travel) which increase each January by 1% more than the previous July's Retail Price Index (RPI) figure.
The Association of Train Operating Companies (ATOC) has created a new online guide that explains why the fares go up, where the money goes and how to save money.
Where does the money go?
For every pound of income that train companies receive, on average:
48p goes to Network Rail (which charges train companies to run trains on the tracks) and other infrastructure costs
17p goes on staff costs
17p goes on miscellaneous costs (including train maintenance, administration, contractors)
11p goes on leasing trains
4p goes on fuel / energy
3p goes to train company profit
What improvements have fares helped to fund at London Midland?
Over the past few years, there has been huge programme of investment, including:
- The introduction of 64 trains worth over £300m, including the largest ever order of Midlands-built class 172s (for the Snow Hill line) and 37 class 350 Desiros for the Euston line. London Midland now has the youngest train fleet of its size in the UK with another 10 trains due to be delivered in 2014.
- £11.5 million in station improvements including the installation of real-time customer information systems and help points at almost every station on the London Midland network, together with improved wayfinding signage.
- Major timetable improvements across the network, including the launch of 3 trains per hour between Birmingham and London, a trebling of the Northampton to London daytime service, a doubling of the Birmingham to Liverpool frequency and the introduction - and subsequent improvement - of a brand new service between Crewe and London via the Trent Valley. Sunday services have also been enhanced, with more trains than ever before between the Trent Valley and London, and between Worcester and Birmingham.
- Innovative projects to increase capacity and improve journey times, including the upgrading of our class 350 trains to travel at 110mph, and the fitting of automatic passenger counting equipment to key fleets.
- Provision of thousands of extra seats at key times through timetable alterations and additional trains, peak and off peak, both in the Midlands and to/from London Euston.
- The introduction of an innovative new 'railcar' - the Parry People Mover - to run a 10 minute frequency service between Stourbridge Junction-Stourbridge Town together with a brand new Sunday timetable.
Do all fares go up?
No. Some will stay the same and some may also decrease; however the average rise will be 2.8%.
London Midland has also been at the forefront of price cutting policies and will continue to evaluate prices regularly. In recent years we have introduced a range of dedicated 'London Midland only' tickets for longer distance journeys (peak and off-peak), first class weekend upgrades and Very cheap Advance fares from just £5 each way.
We have also been pioneers in running regular sales and special offers, especially through our website londonmidland.com.
What about unregulated fares?
The government chooses to regulate peak fares to help protect those who have to travel. However, as most leisure travel is discretionary, it is in the train companies' interest to make it attractive, especially where there is a car, coach or even plane alternative. Rail passenger numbers have gown by over 75% over the last 15 years are growing
Is anything being done to limit fare rises in the future?
Train companies and the wider rail industry know that in the longer term, the way to limit future fare increases is to reduce the overall cost of running the railways. That's why train companies and other rail organisations are working with the government to cut costs and deliver better value for money for both passengers and taxpayers in the future. Overall annual costs have already fallen by more than £700million in the last five years.
What can I do to save money?
There are lots of ways to save money on train travel. These include using a Railcard, travelling at quieter times, buying a season ticket, booking in advance, and using money-saving tools on websites. Click here for more information.
Is it now more expensive than ever to travel by rail?
No. Travelling by season ticket is cheaper now than it was 15 years ago. Additionally, fares have risen at a significantly slower rate since privatisation than during the last 15 years of British Rail.
Why are fares increasing when the service has been poor recently?
97p in every pound goes towards the costs of running the railway and train operators only make a small return from running a highly complex operation that involves significant investment and risk. If fares were not increased, not only would London Midland make a loss, but the future income of the Franchise would be affected as fares increases are capped each year.
However, we accept that our performance over autumn/winter was very poor, and have therefore offered additional compensation (over and above Delay Repay) - details here.