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  1. Spotlight on Policy
31 July 2018updated 01 Aug 2018 12:11pm

For every major connection, business travel within the UK is cheaper by air than by rail

Fare gaps of over £275 highlight the prohibitive cost of using trains in the UK for business.

By Will Dunn

More than 14 million business trips were taken within the UK in 2017, and efficient travel within the UK is widely seen as essential to spreading economic growth from London to other cities. The leading argument for HS2, which is projected to cost £56 billion, is that better public transport connections will allow workers to move more freely, leading to a rebalanced economy. But a snapshot of the type of travel actually required by business – short weekday trips between cities, arriving at either end of a working day – has failed to find an intercity rail connection that is not beaten on price by an airline.

For every return journey from a UK metropolitan economy to London – the most popular type of business travel in the UK – on which the option of rail or air is available, we compared the cost of booking a ticket one month in advance, arriving and departing for typical working hours. In every case, air fares were lower than the equivalent train journey. 

A return trip from Edinburgh to London in the first week of September (arriving for 9am and departing after 5pm) costs £172.50 by rail, using the cheapest option of booking two single tickets. To make the same trip using Ryanair flights, at the same times on the same day, costs £34.10. A return train ticket that allows the use of the same peak-time services on this route costs £311 – over nine times the cost of the cheapest flight – while a flexible Flybe airfare is still over £85 cheaper, at £225.96.

Similarly, a one-day business trip from Manchester to London – arriving at around 0930 and returning for around 1930 – costs £59.98 to fly with Flybe in the first week of September. Train services on the same day, arriving at the same times, are more than three times as expensive, at £208 for two single tickets. A flexible Advance Return ticket for peak services on this route costs £338.

The same is true for every other example of a one-day, weekday trip, leaving time for a business day and booked one month ahead, from any of the UK’s metropolitan economies to London and back. A trip from Exeter to London is over £100 cheaper by air (£88.98, Flybe) than by rail (£190 for two singles/£259 Advance Return, GWR). Glasgow to London, at £38-£40 (Ryanair/Flybe), is almost £200 cheaper than the train (£231.25, Virgin Trains).

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Both types of transport are effectively subsidised, in different ways. Airlines do not have to pay duty on fuel, while direct government support for the rail industry totalled £4.2bn in 2016-17.

Nor are operating costs wildly different. Short-haul airlines operate at a cost per available seat mile (CASM) that can vary from 6-12 pence. A report produced by the Office of Rail and Road in 2012 reported Virgin Trains’ costs per passenger kilometre at 9.32 pence.

At this benchmark, the cost to Virgin Trains of carrying a passenger on the 672km return journey from Manchester to London is £62.63. Given these conditions, a 589-seat Pendolino 390/1 train could theoretically make the return journey from Manchester to London at peak times with just 110 passengers on Advance Return tickets, sitting in standard class, and more than cover its costs. A total of 479 seats – all 144 First Class seats and 334 Standard Class seats – could be left empty and the train would still make a profit. The accounts for Virgin Rail Group Holdings Limited, which operates this service and services between London and Leeds, Liverpool, Manchester, Birmingham and Glasgow, show a profit for the year ending March 2017 of more than £51.6 million, with more than £47.2 million in dividends paid to shareholders.

Last year saw both the biggest rise in fares for five years and the biggest drop in rail passenger numbers for a decade, as commuters returned to car travel or, in extreme cases, moved jobs or houses to escape season ticket prices of over £5,000 a year.

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