Rail operators suffer fall in dividends as Waterloo closure and strikes hit bottom line
Rail operators’ dividends dropped by a quarter last year, with firms blaming strikes and a month-long platform closure at London Waterloo.
Dividends totalled £300m for 2017-18, down 27 per cent on 2016-17, according to Office of Rail and Road (ORR) figures released today, as the station closure hit journey numbers.
Read more: Passenger satisfaction falls to 10-year low
“After decades of increasing passenger numbers, record investment from the public and private sectors is going into improving rail services for the long term,” said Paul Plummer, chief executive of industry body the Rail Delivery Group.
“These figures show that under the current partnership model, when journey growth slows, both the public and private sectors share financial risk which incentivises good performance for customers and the economy.”
Passenger fare income dropped 2.4 per cent to £9.8bn between April 2017 and March 2018, largely due to an eight per cent drop in South West Trains journeys caused by Waterloo’s part-closure in the summer of 2017.
Meanwhile, operators' net franchise payments to the government fell 40 per cent to £400m compared to £700m the previous year.
The ORR said the decrease was down to a combination of factors, including planned cost increases on some franchises, payments to train operators for delays to infrastructure upgrades and lower than expected revenue growth.
Unplanned delays and cancellations sent Network Rail’s payments to train operators up 4.3 per cent year on year.
Read more: These are the 10 rail operators with the most delayed train services
It comes after passenger satisfaction in the railway fell to a 10-year low, according to Transport Focus research released yesterday, largely due to May’s timetable chaos, which the ORR’s latest statistics do not include.
Overall the rail industry received £19.4bn of income in the year to March 2018, 1.3 per cent down on the previous period. But costs grew 1.4 per cent as the industry forked out £20.6bn.