Passenger rail: Trends and comparisons for franchised operators

Passenger rail: Trends and comparisons for franchised operators sets out our analysis of trends in the franchised passenger rail industry and compares the costs and revenues of franchised operators, in the context of the service they provide.

The first part of this report discusses the changes in costs and revenues in the franchised passenger rail industry between 2001 and 2014 and the possible factors that may account for the changes over this period.

The second part of the report compares the costs and revenues of train operators in the UK, in 2014. This section of the report discusses the possible reasons for the differences in costs and revenues between operators.

As part of our work to improve understanding of train operator costs and revenues we also commissioned two consultancy projects in 2014. The first of these was a feasibility study of the possibility of constructing a dataset of European train operating companies. The second is a study into the controllability of different aspects of train operators’ rolling stock and other costs.

More information on each study

• The first study, An assessment of the feasibility of compiling a dataset of European Train Operating Companies, produced by Civity, investigates the potential for compiling a dataset of European train operating company costs, revenues and input and output measures. This report was commissioned following the recommendation of the Rail Value for Money study that ORR investigate the possibility of international benchmarking of train operating companies. The report interviewed operators in Europe and Great Britain to understand more about the difficulties involved in compiling such a dataset. The report found that differences in the character of train operators and in reporting standards between European countries would make the compilation of dataset at the train operator level very difficult. However, the report recommends that whole industry comparisons between nations might be a more fruitful approach to examining the efficiency of the passenger rail sector.
• The second study, Understanding the Rolling Stock Costs of TOCs in the UK, produced by SDG, looks at what the core rolling stock related cost drivers are for passenger train operating companies. It discusses the extent to which train operators are able to control their different cost types, within the framework of franchising and given the constraints of infrastructure, and it discusses how operators’ costs may be expected to differ from average on the basis of their service characteristics.