Is the UK rail industry getting back on track?
Financial results from Northern Trains and LNER look on first glance like the same old story.
LNER said pre-tax profit had stalled at £6.6m as it was impacted by costs associated with industrial action and stormy weather. The number of trains classed as “on time” also fell a few percentage points to 56.6 per cent.
Northern Trains, meanwhile, saw pre-tax profit dip by just under £1m to £8.7m, while the number of on time trains fell by 1.3 per cent to 79.1 per cent.
Both firms, owned by the Department for Transport (DfT), cited a “challenging” operational backdrop, which has influenced the slower-than-expected post-pandemic recovery affecting much of the sector.
However, there are signs in the Companies House reports that the tide may be turning. Take a look at passenger revenue and one thing is very clear, demand is bouncing back considerably.
If there is one thing that will determine the industry’s recovery, more than GBR, nationalisation, or any investment in infrastructure upgrades, it’s passenger numbers.
LNER made £764.7m from passengers last year, up by almost £100m from £674.8m last year, in a sign Brits are increasingly looking to travel by train.
This was echoed by Northern Trains, which hauled in £359.7m in passenger revenue as it reported record demand and was the busiest ever Saturday over the year. “Passenger revenue has now recovered from the pandemic,” the board announced in a statement.
The results themselves are interesting. But they also fall at a time of considerable change in an industry that has lacked positive news for years.
Two-years worth of industrial action, which has hammered the industry to the tune of more than £1bn, was finally put to bed in September when unions struck a pay deal with operators.
The new Labour government is planning to bring railways into public ownership, a policy the jury is still out on. However, part of the plans involve bringing in state-owned Great British Railways, a guiding mind staffed by experts that is backed by the majority of the sector’s leading voices.
It is the perfect time for demand to reach new levels, following years of struggles since Covid-19 and home working trends decimated passenger numbers.
FTSE 250 online ticket seller Trainline said in May it had smashed through the £5bn milestone for ticket sales, buoyed in particular by UK demand. Some £3.5bn worth of tickets were sold in the UK alone as the rail market recovered.
According to data from the Office of Rail and Road, a total of 1.6bn journeys were made by rail passengers in the latest 12-month period, a 16 per cent year-on-year increase.
With no more strike action and rail reform well-underway, the signs are looking positive.