Caledonian Sleeper

[CBlue]

Just about every alternative doesn't require a ridiculous level of subsidy!

The sleeper would never pay for itself or even come close - as far as cost benefit goes you'd be far better off spending the money on something else instead of what feels a bit like a vanity project by politicians.

 

[zwk500]

Just about every alternative doesn't require a ridiculous level of subsidy!

Aren't the Anglo-Scottish flights to anywhere other than the central belt quite well supported by public funds?

The sleeper would never pay for itself or even come close - as far as cost benefit goes you'd be far better off spending the money on something else instead of what feels a bit like a vanity project by politicians.

Maybe they should try sticking 'Belmond' on the front and trebling the fees. Would mean dropping the seated coaches though (they don't really fit with the 'exclusive' ambience of a Belmond operation).

 

[Bald Rick]

Aren't the Anglo-Scottish flights to anywhere other than the central belt quite well supported by public funds?

Nope.

You might be thinking of flights from Scotland mainland to the islands.

 

[williamn]

Flights already very well subsidised by there being no VAT on fuel.

 

[Bald Rick]

Flights already very well subsidised by there being no VAT on fuel.

which for most domestic flights is more than offset by Air Passenger duty (by a long way).

 

[D6130]

Flights already very well subsidised by there being no VAT on fuel.

AFAIK the railway companies don't pay VAT on diesel fuel either.

 

[Dave W]

AFAIK the railway companies don't pay VAT on diesel fuel either.

As their outputs (tickets) are taxable - albeit at the zero rate - they should be able to claim back any VAT incurred on costs incurred in the course of making those outputs anyway.

I don't know if there's a derogation or similar for rail companies on top of that, sure someone will be along to say!

 

[Bletchleyite]

VAT isn't the big fuel tax, fuel duty is. VAT is a small amount on top.

 

[Davester50]

which for most domestic flights is more than offset by Air Passenger duty (by a long way).

No APD on flights from H&I airports, and not limited to just intra-H&I departures.
Aberdeen does have APD on flights.

 

[Butts]

No APD on flights from H&I airports, and not limited to just intra-H&I departures.
Aberdeen does have APD on flights.

Try telling Loganair that with their extortionate fares.

Aberdeen is in The Grampians hence no APD not applicable.

 

[CaptainBen]

Serco might be paying a dividend to their shareholders. I doubt that Serco Caledonian Sleepers Limited are paying a dividend to Serco. They didn't pay one in either 2019 or 2020.

Sorry for bringing this up a few pages later... Serco Caledonian Sleepers Ltd will probably never be in the position to legally pay a dividend, with an £88m shareholders deficit on the latest balance sheet. But I don't see that getting in the way of bashing "greedy shareholders".

One wonders how horrified the general public would be if the cost of tickets on the sleeper were increased to actually reflect the (unsubsidised) cost of putting on the service. That would be a startling figure for most rail journeys, I think, but I doubt you'd find many people willing to pay over £1k to get them to Rannoch for a few days walking.

 

[XAM2175]

Try telling Loganair that with their extortionate fares.

APD is charged in addition to the fare, so I fail to see how this is relevant.

Aberdeen is in The Grampians hence no APD not applicable.

You are wrong:

Exemptions from Air Passenger Duty

Check which types of passengers or flights are exempt from Air Passenger Duty.

www.gov.uk

Passengers carried on flights leaving from airports in the Scottish Highlands and Islands region are exempt.

This area is defined as:

• the Highland Region, Western Isles Islands Area, Orkney Islands Area, Shetland Islands Area, Argyll and Bute District, Arran, Great Cumbrae and Little Cumbrae
• in the Moray District, the parishes of Aberlour, Cabrach, Dallas, Dyke, Edinkillie, Forres, Inveravon, Kinloss, Kirkmichael, Knockando, Mortlach, Rafford and Rothes

Passengers on flights from other areas of the UK to airports in this region are not exempt.

 

[norbitonflyer]

AFAIK the railway companies don't pay VAT on diesel fuel either.

Whether or not they do, they can claim it back as rail fares are VAT-exempt.

 

[Davester50]

Try telling Loganair that with their extortionate fares.

Aberdeen is in The Grampians hence no APD not applicable.

Call for end to Highland airport 'tax haven'

The "tax haven" status of Inverness Airport has been challenged by rival operators.
People flying to and from the Highland capital have been exempt from paying Air Passenger Duty (APD) since 1994.
Scotland-wide plans to abolish APD were dropped in May and now Aberdeen Airport is calling for greater parity with its Inverness rival.
Highlands and Islands Airports Ltd said the exemption "must remain in place to protect remote and rural communities".
Extending the APD exemption to Aberdeen or for the tax to be charged on some flights from Inverness have been mooted.
The call comes from the independent consultative committee which advises Aberdeen International Airport.

Long-haul flights​

Committee chairman Dr Peter Smart said passengers on a long-haul flight, routed through London Heathrow or Amsterdam, could currently save £78 on a ticket by flying through Inverness instead of Aberdeen, 92 miles away.
He said: "What we're seeking is action from government to ensure that Aberdeen and Inverness are treated identically.
"It's for government to decide how but the two options seem to us to be either exemption for flights from Aberdeen or levying APD on flights from Inverness to destinations outside the highlands and islands area.
"It's about time Inverness is required to operate just like any other airport of its size, on a commercial basis.
"What might have been appropriate a few years ago, when its passenger numbers were less than half a million, cannot, we feel, be justified now.
Dr Smart said that separate public subsidies for a route out of Dundee Airport meant, "one might compare Aberdeen to a highly taxed island sitting between two tax havens".

Can't disagree with what Loganair charges, but maybe it reflects the true cost, minus any subsidies?
BA might take the decision to charge less on the ticket, (not the total fare including taxes), as it feeds in to the bigger Longhaul network.

 

[miami]

According to ITA, Inverness to London Heathrow and back attracts

United Kingdom Passenger Service Charge Departures (UB) £32.96
United Kingdom Exceptional Regulatory Charge (R1) £8.90
United Kingdom Air Passenger Duty APD (GB) £13.00

In addition to the base fare (typically £58 each way at the moment - fare basis VZ0R)

For Aberdeen to London and back it's

United Kingdom Air Passenger Duty APD (GB) £26.00
United Kingdom Passenger Service Charge Departures (UB) £26.91
United Kingdom Exceptional Regulatory Charge (R1) £8.90

And a V bucked fare (VZ0R) is £93.50.

So while APD is higher, Passenger service charge is lower, and overall it makes very little difference, and ultimately it's the airline's component that makes up the majority of the cost.


I'm not sure how APD would make any difference to the end price people pay - the airlines will charge the maximum amount they can get away with. If APD was too high, they simply wouldn't run the service. If APD was lower they would keep more in profit, because if they currently can charge £200 return, they'll charge that whether the tax was £0 or £50.

 

[Davester50]

The big difference isn't in Economy though.

 

[HamworthyGoods]

Can someone shed some light on the social distancing reason that CS are using to keep the club car shut.

It’s the social distancing for staff, CS chose not to have pantries for the staff like the old mk1 and mk3 sleepers instead relying on one very small compact rest area for all staff. Covid-19 has shown what a folly this is and the club car is having to be used in lieu.

 

[Journeyman]

It’s the social distancing for staff, CS chose not to have pantries for the staff like the old mk1 and mk3 sleepers instead relying on one very small compact rest area for all staff. Covid-19 has shown what a folly this is and the club car is having to be used in lieu.

I don't think it's particularly fair to use the word "folly". The pandemic has been a once-in-a-century occurrence that no-one saw coming.

 

[miami]

The big difference isn't in Economy though.

It's 1h34 each way. Taxes and charges in business class (which is relatively new on UK domestic flights)

United Kingdom Passenger Service Charge Departures (UB) £32.96
United Kingdom Exceptional Regulatory Charge (R1) £8.90
United Kingdom Air Passenger Duty APD (GB) £26.00


An A320 inverness to London will use about 250kg per passenger in economy (and in BA business 50% more), with carbon capture in the $100/ton range, or £34 for economy, this isn't far off APD costs if they were charged in both directions.

Even if you increase that carbon capture 5-fold to the top end of current estimates, it's difficult to argue for massive subsidies for a sleeper train, when the money could instead be spent on carbon capture. The sleeper has what, 50 berths? An extra 13 tons of CO2 if flying. At top end estimates of £330 per ton capture that would be £4300 per direction per day, or £2.7m a year. Fort William and Aberdeen have half that number, so the highland sleeper at best saves £5.4m a year in carbon offsets. With the low end carbon capture estimates it's £500k a year. APD alone from extra passengers would cover that.

In 2019/20 the sleeper lost £4.6m, obviously that includes the lowland sleeper too, but that service will become even less justified with HS2 dropping the end-to-end journey to well under 4 hours.

 

[Bald Rick]

In 2019/20 the sleeper lost £4.6m, obviously that includes the lowland sleeper too, but that service will become even less justified with HS2 dropping the end-to-end journey to well under 4 hours.

It lost a lot more than that if you include the subsidy!

 

[Davester50]

It's 1h34 each way.

Yup, and longer than the Amsterdam to Heathrow/Gatwick flight.
People do pay more for Club Europe. Why? As a bolt on to LH, and for a myriad of other reasons.
Much like people travelling to Inverness from the South. The majority won't use the sleeper, as there are less expensive ways to get there.

This is all off topic and more suitable to another thread however.

 

[HamworthyGoods]

I don't think it's particularly fair to use the word "folly". The pandemic has been a once-in-a-century occurrence that no-one saw coming.

Not providing suitable staff accommodation like the old stock was already an issue prior to covid and tied up with some of the industrial unrest, covid has just made the issue boil over.

 

[Blindtraveler]

On my last sleeper trip pre virus last year ear quite a few staff tended to hangout in the the luggage area at the non toilet end of the seats. At one point the noise got a little rowdy and I woke me at about 3 in the morning. I stumbled through to remonstrate and got a free drink for my troubles and an apology. It was only then that I became aware that staff accommodation was a big problem and in the morning when the train docked at platform 7 in Edinburgh I spent a couple of minutes in full on whinge mode with several staff members about this inadequacy and and said that if they took industrial action about it I would support them

 

[miami]

It lost a lot more than that if you include the subsidy!

Indeed. It seems that the best bet would be to completely close the sleeper routes, and use the savings to offset the carbon - perhaps by pushing more electrification.

It's a luxury hotel on wheels, it should not be receiving taxpayer subsidy.

 

[D6130]

It's a luxury hotel on wheels, it should not be receiving taxpayer subsidy.

Indeed....why not sell the stock to Belmond or, better still, swap it for their beautifully-refurbished mark 3 sleepers?

 

[Blindtraveler]

As many will doubtless be aware when the question of replacement of the complete sleeper fleet was first raised the option of complete withdrawal and closure of the service whilst considered by both Scottish and Westminster governments. Quite how we went from potential closure to luxury tourist hotel on rails is beyond me, I can only assume that someone somewhere in one government department or another allowed the recent obsession with tourism to run away with and somehow the idea grew legs or push through because somebody somewhere wasn't paying attention and we now have the current situation.

 

[JonathanH]

As many will doubtless be aware when the question of replacement of the complete sleeper fleet was first raised the option of complete withdrawal and closure of the service whilst considered by both Scottish and Westminster governments. Quite how we went from potential closure to luxury tourist hotel on rails is beyond me, I can only assume that someone somewhere in one government department or another allowed the recent obsession with tourism to run away with and somehow the idea grew legs or push through because somebody somewhere wasn't paying attention and we now have the current situation.

I think it is more about a desire to improve the accommodation on board, which clearly comes at an increased price. Firstly, berths have been lost to accommodate the en-suite facilities and double rooms. That means that the number of people who can travel is less - they consequently have to put the price up. Putting the price up means it needs to be marketed consistently. I don't think new stock could have been built that simply replicated what was there before.

 

[Peter Sarf]

As many will doubtless be aware when the question of replacement of the complete sleeper fleet was first raised the option of complete withdrawal and closure of the service whilst considered by both Scottish and Westminster governments. Quite how we went from potential closure to luxury tourist hotel on rails is beyond me, I can only assume that someone somewhere in one government department or another allowed the recent obsession with tourism to run away with and somehow the idea grew legs or push through because somebody somewhere wasn't paying attention and we now have the current situation.

I think the baby got thrown out with the bath water. There was a need to replace the stock. So a wish list is arrived at that lists all the new things that are wanted (en-suite and nicer ambience). Nobody bothers to list what existing features are desirable (I have experienced basic features missing from replacement computer systems that made the system useless). The result is something expensive that does not fulfil the original purpose.

Now if someone did explore the possibility of keeping the original business model with new stock then I suspect the reply would of been we are not subsidising the cost of new stock. The sleeper service would have ended then.

So alternative is to give everyone what they are asking for as that helps justify the state paying for it. It then follows that ,because it is so much more wonderful (theoretically), premium prices can be charged to alleviate that cost. Plus it is drawing high paying tourists to Scotland so brings more foreign income to Scotland as they visit various places. That probably ticked a box for Scottish subsidy. There are green credentials to be had here (ignoring how they got to the UK).

If the train is consistently full and (maybe) costs less in subsidy then it is a success in terms of avoiding axing the service. The fact that it is not the same service in the eyes of many original customers is ignored. How many decision makers have used the service (old or current) I wonder.

But the quality is not there and the thing seems unworkable (staff accommodation and logistics wise). If those problems are overcome the sleeper might pay for itself better than it did with the old business model.

However, if the train is not kept full and loses more money than the subsidy allows then one of two things happen.
a) The service is abandoned and as much money as possible is made out of the assets (stock). But who wants the assets ?. Maybe GWR at a knock down price ?.
b) The stock investment is written off and the service is dumbed down to make running costs less.

I can guess that half the stock will be sold to GWR and the rest used on a reduced service.

At least an alternative has been tried.

But then what is the non-Covid actual loss ?.

 

[ajrm]

Nope.

You might be thinking of flights from Scotland mainland to the islands.

Loganair's Dundee-London flight is supported by Public Service Obligation funding, along with many of its more remote routes:

New services from Dundee Airport

www.loganair.co.uk

 

[Butts]

Loganair's Dundee-London flight is supported by Public Service Obligation funding, along with many of its more remote routes:

New services from Dundee Airport

www.loganair.co.uk

You wouldn't think so if you looked at the fares charged compared to unsubsidised Edinburgh Departures.