Is there way of making the Caledonian Sleeper more profitable?

Iskra said:

I think that the easiest way to improve efficiency and profitability would be to re-integrate everything with Scotrail (e.g. guards, catering staff, lounge hosts, control, head office people, customer services). It's just unnecessary duplication and resource-inefficient.

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How much of the CS operation is actually duplicating Scotrail, or would just be another team within Scotrail dedicated to CS operations if it was folded back in?
Presumably at least some head office functions are already shared, as both CS and Scotrail are part of Scottish Rail Holdings?

In terms of increasing profitability - it seems strange to me if so many people are being turned away that there isn't any discussion of additional capacity.

Clearly there are some significant hurdles (such as not having the rolling stock to do it), but, as one example, during the festival / summer tourist season, attempting to run a third nightly train with some form of Edinburgh / Inverness split (or run one full train solely to Edinburgh and reorganise the split sets in some other way, for example some potential for Glasgow / Fort William to be the pairing, allowing Fort William seated passengers to travel all the way through.

I began collating some numbers in the below Google sheet, which is of course based on the little information I can find, at 2015 prices, of contract values etc. It has assumed all Mk5 vehicles cost the same (they don't). It assumed all trains are at 100% capacity (they aren't). I have entirely ignored the seated passengers, or any retail spend, and have divided costs purely by the sleeper coach capacity.

I have made the table editable, so do feel free to make my numbers better. It was more a thought process of, if I was to buy a new Mk5, and it ran 6 days a week all year, at 100% capacity, and had a 30 year lifespan, what would the cost, per berth, per journey be. That is interesting to me (if flawed for all the reasons above and probably lots of others I can't think of yet).

I followed the same process with the available figures for GBRF traction and contract details.

There are of course many numbers which I have no insight into, for example the costs of CS' own staff, their back office costs, the Network Rail access charges and lots of other things, and indeed the subsidy from Scottish Government in Serco days (when these contracts were awarded).


However, with the heavy provisos of all of the above, it doesn't seem entirely impossible to me that capacity could be added, and additional revenue generated, for which, whilst I would understand scepticism based on the subsidy currently given, nobody can have definitive understanding of the potential demand additional capacity would facilitate, since for various dates in August, using London - Edinburgh as an example, the Doubles are sold out for the entirety of the festival,


and there is a night where Classic is also sold out,


with various others already down to a handful of available rooms.

Based on the principle of "things change" - it doesn't seem unreasonable to me for a traveller to be able to book a room for travel in the coming days or weeks (as they might do for Avanti or LNER services, albeit at a premium for the short notice booking). However, using the same London to Edinburgh Example, there are a total of 5 remaining rooms in Classic for the entirety of the remainder of the Month of March, a further 13 sleeper journeys.

The question that must be asked about the economics of added capacity is what the marginal cost of a berth/seat would be even assuming that adding it requires no additional staffing at all.

If the revenue is less than that value, adding capacity will not stem the bleeding.

HSTEd said:

The question that must be asked about the economics of added capacity is what the marginal cost of a berth/seat would be even assuming that adding it requires no additional staffing at all.

If the revenue is less than that value, adding capacity will not stem the bleeding.

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Sure, and I think a key question is whether the existing breakdown of different travel Classes, Seat, Classic, CLub and Double, reflects the mix of the available market. The fact that for a journey 6 months away, a visitor to the biggest arts festival in the world, where hotel accomodation is incredibly costly and so, enjoying a day in Edinburgh and then travelling south overnight is an entirely valid and logical thing to do .... said visitor cannot book a double room .... would suggest that mix is perhaps incorrect for the market now served.

I am not sure how anyone (me included) can take any kind of informed view as to the available market when it is so clearly suppressed currently. I would have thought, from even my basic understanding of economics, that dividing the costs of the back office functions (website etc) across 3 trainloads of passengers would be more cost effective per passenger than 2.

According to the CS website, seats can recline up to 10 degrees without impacting other guests


Could there be an ability to increase the reclining angle so people can get a better night's sleep?
I doubt the economics add up, but could there be an additional seats-only service running from Edinburgh/Glasgow to Euston with individual seats that fully recline, at a cost to seating density per carriage, possibly re-equipping some of the ex-Transpennine Mk5 sets?

gc4946 said:

According to the CS website, seats can recline up to 10 degrees without impacting other guests

Seated Coach| Luxury Train Travel with Caledonian Sleeper

Whether you’re travelling for business or pleasure our seated coach include internet access, multiple charging points and a reading light.

www.sleeper.scot

Could there be an ability to increase the reclining angle so people can get a better night's sleep?
I doubt the economics add up, but could there be an additional seats-only service running from Edinburgh/Glasgow to Euston with individual seats that fully recline, at a cost to seating density per carriage, possibly re-equipping some of the ex-Transpennine Mk5 sets?

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Deeply reclining seats will likely run into the same safety case issue that did for the pods.
In an end on collision, if the seat angle is too shallow the passengers could suffer neck injuries.

Couchette style service perhaps?

gc4946 said:

Could there be an ability to increase the reclining angle so people can get a better night's sleep?
I doubt the economics add up, but could there be an additional seats-only service running from Edinburgh/Glasgow to Euston with individual seats that fully recline, at a cost to seating density per carriage, possibly re-equipping some of the ex-Transpennine Mk5 sets?

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The platforms at Euston are not long enough to extend sets beyond 16 coaches, which is already the length of both Highlander and Lowlanders.

So you would need to either invest in extending them, or remove a sleeping coach to compensate.

trebor79 said:

Given the train is often booked out, it would be worth a trial at least, no?
If it was running with empty cabins if agree that you'd just lose revenue. But it doesn't. It runs with all vanins but only about 50% of berth occupied.

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It is a misconception that it runs with 50% of berths unoccupied. That would be true only if every room sold had only one occupant, and that is far from the case as we know. At an educated guess from my experience on the sleepers I would estimate somewhere around 70-80% of berths are occupied - ie about half have the rooms people sharing already, and the other half solo travellers. A further educated guess would suggest that at least half of the solo travellers would not consider sharing with a stranger. (I certainly wouldn’t, and can’t think of many people I know who would be willing to either, even with a massive discount).

Which means that a ‘sharing with strangers’ policy would, probably, only increase berth occupancy by 10% at the most, allowing for inevitable mismatches, but with reduced revenue from those who already intended to use the sleeper ‘down trading’. So the revenue gain would, in my opinion, be low single digit% (if anything) for a whole load of hassle.

snowleopard said:

Re whether demand exists only on this forum: I suppose the only way to really find out is doing some market research a.k.a a survey, ideally among both current CS customers, and the general public (to capture those who have given CS a miss to date due to pricing).

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That market research has been done, and we have the current service offer as a result.

Carntyne said:

You could put the fares up. The trains are full all the time, so scope to increase.

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Is, of course, the answer. Not very welcome. But it does seem to be the obvious solution.

jagardner1984 said:

In terms of increasing profitability - it seems strange to me if so many people are being turned away that there isn't any discussion of additional capacity.

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But it runs at a significant loss, and runs at maximum capacity in the current method of operation. Every method of increasing capacity will incur more cost than the revenue it can realise, as you need more rolling stock, staff, potentially infrastructure etc.

I’m not saying increasing capacity is not desirable, but in the context of this thread it wouldn’t improve profitability by itself.

jagardner1984 said:

In terms of increasing profitability - it seems strange to me if so many people are being turned away that there isn't any discussion of additional capacity.

Clearly there are some significant hurdles (such as not having the rolling stock to do it), but, as one example, during the festival / summer tourist season, attempting to run a third nightly train with some form of Edinburgh / Inverness split (or run one full train solely to Edinburgh and reorganise the split sets in some other way, for example some potential for Glasgow / Fort William to be the pairing, allowing Fort William seated passengers to travel all the way through.

I began collating some numbers in the below Google sheet, which is of course based on the little information I can find, at 2015 prices, of contract values etc. It has assumed all Mk5 vehicles cost the same (they don't). It assumed all trains are at 100% capacity (they aren't). I have entirely ignored the seated passengers, or any retail spend, and have divided costs purely by the sleeper coach capacity.

I have made the table editable, so do feel free to make my numbers better. It was more a thought process of, if I was to buy a new Mk5, and it ran 6 days a week all year, at 100% capacity, and had a 30 year lifespan, what would the cost, per berth, per journey be. That is interesting to me (if flawed for all the reasons above and probably lots of others I can't think of yet).

I followed the same process with the available figures for GBRF traction and contract details.

There are of course many numbers which I have no insight into, for example the costs of CS' own staff, their back office costs, the Network Rail access charges and lots of other things, and indeed the subsidy from Scottish Government in Serco days (when these contracts were awarded).

Caledonian Sleeper Additional

Summary Costs per Berth Per Journey For Additional Vehicles TOTAL,£45.65 CAF,£21.37 GBRF,£24.28 CS NR

docs.google.com

However, with the heavy provisos of all of the above, it doesn't seem entirely impossible to me that capacity could be added, and additional revenue generated, for which, whilst I would understand scepticism based on the subsidy currently given, nobody can have definitive understanding of the potential demand additional capacity would facilitate, since for various dates in August, using London - Edinburgh as an example, the Doubles are sold out for the entirety of the festival,
View attachment 154299

and there is a night where Classic is also sold out,
View attachment 154300

with various others already down to a handful of available rooms.

Based on the principle of "things change" - it doesn't seem unreasonable to me for a traveller to be able to book a room for travel in the coming days or weeks (as they might do for Avanti or LNER services, albeit at a premium for the short notice booking). However, using the same London to Edinburgh Example, there are a total of 5 remaining rooms in Classic for the entirety of the remainder of the Month of March, a further 13 sleeper journeys.

View attachment 154301

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Are you doing costs per berth or per room?

Definitely interesting to make an estimate of costs in any case!

Bald Rick said:

But it runs at a significant loss, and runs at maximum capacity in the current method of operation. Every method of increasing capacity will incur more cost than the revenue it can realise, as you need more rolling stock, staff, potentially infrastructure etc.

I’m not saying increasing capacity is not desirable, but in the context of this thread it wouldn’t improve profitability by itself.

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There's one exception to this: increasing the number of seats in the seated carriage could increase capacity by a small amount. Whether this is worth doing is another question, though I would be in favour if the current seats were replaced with more comfortable ones, something similar to the new avanti standard class for example, in a 2+2 arrangement

paul1609 said:

3) Delay the departure of the Highlander to 23.30 enabling the trains to be flighted.

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Which means that with your "run the Lowlander to Edinburgh and split there" plan you will have both trains shunting at the same time. If you don't want to have extra shunters then you need to stagger their arrival into Edinburgh.

Iskra said:

I think that the easiest way to improve efficiency and profitability would be to re-integrate everything with Scotrail (e.g. guards, catering staff, lounge hosts, control, head office people, customer services). It's just unnecessary duplication and resource-inefficient.

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And use crews from the IC TOCs south of the border, as used to be the case. It does leave the issue of retaining competency for ECML diversions, and of course there's Avanti's inability to employ enough drivers.

Bald Rick said:

It is a misconception that it runs with 50% of berths unoccupied.

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Has anyone said that they are?

Bald Rick said:

I would estimate somewhere around 70-80% of berths are occupied - ie about half have the rooms people sharing already, and the other half solo travellers. A further educated guess would suggest that at least half of the solo travellers would not consider sharing with a stranger. (I certainly wouldn’t, and can’t think of many people I know who would be willing to either, even with a massive discount).

Which means that a ‘sharing with strangers’ policy would, probably, only increase berth occupancy by 10% at the most, allowing for inevitable mismatches, but with reduced revenue from those who already intended to use the sleeper ‘down trading’. So the revenue gain would, in my opinion, be low single digit% (if anything) for a whole load of hassle.

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Why would you have reduced revenue? You're only going to have a maximum of two compartments (one of each sex) per portion where a solo traveller is sharing with an unsold (but available for sale) berth. Given how heavily booked the train is you would be filling it most nights anyway. For every twin room, CS earn £150 for a marginal cost (just the extra laundry etc.) compared with a private solo occupied room.

The failure to order couchette coaches (four berth to fit within the loading gauge) was a missed opportunity. Safety concerns are less of an issue compared with one-on-one sharing.

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Out of curiosity, given how the Edinburgh portion in particular seems to be heavily booked, how would the cost of running the Lowlander as two seperate trains stack up? Let's pretend that the rolling stock is already available to lease. At the moment there are seven 92s, and I presume that there are five diagrammed per night (two covering London-Edinburgh and Edinburgh-London with the Highlander, two doing the same from Glasgow with the Lowlander, plus the one shuttling between Edinburgh and Carstairs). To run both Lowlander portions through you'd need a sixth loco in use (so an eighth on hire), complete with enough drivers and guards to run the extra train south of Carstairs, plus the extra vehicles. At the same time you save the costs of the Carstairs shunters. I'm not sure how much passing is involved in the traincrew diagrams, but running an extra service may be able to partially make use of unproductive time.

Krokodil said:

Which means that with your "run the Lowlander to Edinburgh and split there" plan you will have both trains shunting at the same time. If you don't want to have extra shunters then you need to stagger their arrival into Edinburgh.

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They would already be staggered by the different stopping pattern south of Edinburgh. Northbound the Lowlander would be train pulls in from London, Loco runs round detaches Glasgow portion proceeds Back out 15 mins max later?

paul1609 said:

They would already be staggered by the different stopping pattern south of Edinburgh. Northbound the Lowlander would be train pulls in from London, Loco runs round detaches Glasgow portion proceeds Back out 15 mins max later?

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The Highlander needs to run first otherwise it might as well be a red-eye day train. It takes about an hour to shunt the Highlander. The number of stops each train makes isn't considerably different.

Trainbike46 said:

There's one exception to this: increasing the number of seats in the seated carriage could increase capacity by a small amount. Whether this is worth doing is another question, though I would be in favour if the current seats were replaced with more comfortable ones, something similar to the new avanti standard class for example, in a 2+2 arrangement

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Good point. Although I susoect that the cosstif installign another dozen seats or so would take an awfully long time to pay back at £50-90 a ticket. Especially as the seats are the one product that don’t routinely sell out.

Krokodil said:

Has anyone said that they are?

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You might have missed the post I quoted.

trebor79 said:

If it was running with empty cabins if agree that you'd just lose revenue. But it doesn't. It runs with all vanins but only about 50% of berth occupied.

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Krokodil said:

Why would you have reduced revenue?

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Because some people will ‘down trade’ from a solo cabin to a shared one, at lower cost. That is revenue lost, which offsets (in part) the extra revenue generated.

D6130 said:

Even back in BR days lone women travellers would never have been booked to share a sleeping compartment with a random man....or vice-versa. I worked in the travel centre at Guildford for a few months in 1976/77 and the sleeper booking instructions were very specific on that subject.

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Likewise back in the 1970s, when sleepers were first class = sole occupant, second class = share, a woman colleague who travelled overnight Edinburgh to Inverness on business said they only needed to book second, because solo women passengers were unusual and there was never another one to share.

If you want to cut costs just run one sleeper to Edinburgh and one to Glasgow with guaranteed connections to other Scottish destinations.

Bald Rick said:

It is a misconception that it runs with 50% of berths unoccupied. That would be true only if every room sold had only one occupant, and that is far from the case as we know. At an educated guess from my experience on the sleepers I would estimate somewhere around 70-80% of berths are occupied - ie about half have the rooms people sharing already, and the other half solo travellers. A further educated guess would suggest that at least half of the solo travellers would not consider sharing with a stranger. (I certainly wouldn’t, and can’t think of many people I know who would be willing to either, even with a massive discount).

Which means that a ‘sharing with strangers’ policy would, probably, only increase berth occupancy by 10% at the most, allowing for inevitable mismatches, but with reduced revenue from those who already intended to use the sleeper ‘down trading’. So the revenue gain would, in my opinion, be low single digit% (if anything) for a whole load of hassle.

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As you've said, Caledonian Sleeper can sell the berths and people are willing to pay for one to themselves. Letting people share also runs the risk of Caledonian Sleeper being unable to fill each berth with a second person and they'd need to price in this risk to tickets.

Its issue is that 10 births per carriage isn't a lot, if we had a larger loading gauge then double deck carriages with births on both decks might get CS much closer to profitability.

deltic said:

If you want to cut costs just run one sleeper to Edinburgh and one to Glasgow with guaranteed connections to other Scottish destinations.

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The Highlander is subsidised because of the connections it provides to rural Scotland. Its existence is more political than logical (as it is with all UK sleepers...).

I suspect cutting the Highlander would take the Lowlander service with it.

Bald Rick said:

Because some people will ‘down trade’ from a solo cabin to a shared one, at lower cost. That is revenue lost, which offsets (in part) the extra revenue generated.

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So passenger A and passenger B would previously have occupied solo compartments at £225 each (total income £450). They move into a shared compartment, each paying £142.50. There is now a vacant compartment which (depending upon who books it first) will either be occupied by private solo passenger C (£225, total income £510) or by shared passengers D and E (£285 as a couple, £142.50pp, total income £570).

There may be the odd case where there is a berth left unsold so the only passenger onboard is paying £142.50 but you will never see more than one male, and one female berth unsold on each of the five portions because you either have an even number of sharing passengers of a given sex or you have an odd number. The chances of this happening are drastically reduced when you consider that the sleepers are often fully-booked and that a budget option would help to fill the newly-vacant berths.

You mentioned before that most compartments are occupied by couples. Is it any wonder when the effective Single Supplement is £82.50? Are solo travellers less likely to want to travel between London and Scotland, or have they merely been priced off? There's a business opportunity for BlaBlaCar here somewhere.

[all prices above are based on current London to Glasgow fares]

Carntyne said:

You could put the fares up. The trains are full all the time, so scope to increase.

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We've had to book a club double as neither of us can use the steps up to a bunk bed, and so it's cost £500 each way...how much more do you suggest we pay? (there is no discount for a disabled railcard in club)

Memories - of a 6 bunk couchette to Austria when 2 lads shared with 3 ladies. We took the top bunks. Of an 8 bunk male cabin across the North Sea to Norway when one man had a screaming nightmare that he was on a sinking submarine and couldn't get the door open in the dark to escape! Of a very interesting night on a coastal steamer shared with an English speaking Norwegian - but hearing my then girlfriend next door repeating ever louder the same sentence to an older Norwegian lady who clearly didn't understand a word! All harmless experiences and yet....

I can imagine the potential issues that could occur in 2024 and understand a strong reluctance to offer a sharing with strangers option.

JamieL said:

Shared cabins with strangers simply isn't going to happen. Putting strangers together in a confined environment with limited exit options would be a legal minefield and risk terrible publicity when an incident occurred. Odds are the CS would also lose most of its clientele that are currently filling the train.

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The Puddock said:

If Caledonian Sleeper want to try and reintroduce cabin sharing (which I’m sure they don’t since personally I think the demand for only exists on this forum) then they could look to the policies and procedures of another Serco operated Scottish public transport company, Northlink Ferries.

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Shared compartments is how sleeper trains work almost everywhere in the world, with the exceptions of UK and the US (possibly some others but it's not the norm). If that were true Hostels wouldn't be so popular, and I suspect a lot more people are willing to share on a train than in a building. Even Business Class on flights is actually just a mixed dorm.

Killingworth said:

Memories - of a 6 bunk couchette to Austria when 2 lads shared with 3 ladies.....

I can imagine the potential issues that could occur in 2024 and understand a strong reluctance to offer a sharing with strangers option.

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This is still the norm on the brand new sleepers to Austria introduced in past 2 years. Couchettes are mixed gender and it doesn't cause any issues.

Mainline421 said:

This is still the norm on the brand new sleepers to Austria introduced in past 2 years. Couchettes are mixed gender and it doesn't cause any issues.

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Exactly. The reality is people get into the bunk more or less fully clothed, and go to sleep, or try to. The potential issues are really quite imaginary.

Bald Rick said:

That market research has been done, and we have the current service offer as a result.

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I realize I'm treading dangerously closely towards telling people how to do their job (which I really don't want to do), but I wonder if that market research might need to be re-done in the context of (a) a cost of living crisis and (b) increased environmental awareness, i.e. people aren't that keen anymore on taking £50 domestic flights from London to Glasgow, but at the same time may not be able to fork out the current sleeper cabin (solo occupancy) prices.

Incidentally, I've just stumbled on this petition from when sharing with strangers was first banned in 2018: https://you.38degrees.org.uk/petitions/save-shared-cabin-option-option-for-single-people-on-sleeper

It seems at least 220 people were bothered enough to sign a petition about it, which is rather more than I expected when posts on this forum repeatedly say that only a tiny handful of Caledonian Sleeper patrons would ever consider doing this. And as mentioned above, there is a group out there (think young people, students etc.) who are not current CS users for pricing reasons, but might well be happy to share at an acceptable price level. I don't think that fundamentally my 25-35 year old UK friends are so different in mindset than my 25-35 year old continental friends, who use night trains a lot and happily do so in shared cabins, on that point.

Would abolishing the lowlander increase profitability?

Iskra said:

Would abolishing the lowlander increase profitability?

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Well it would increase profitability in the sense of reducing operational losses, simply because less money would be burned on un-renumerative services.

But by that standard the best way to improve profitability would be to give up entirely and cut losses to zero!

We have a fundamental problem in that, given the limitations of our available loading gauge, train length and staff costs, that the passenger density in sleepers can't be high enough to justify the operational expenditures to run them.
If we could run 500m long trains of Superliner sized vehicles it might be different.

snowleopard said:

I realize I'm treading dangerously closely towards telling people how to do their job (which I really don't want to do), but I wonder if that market research might need to be re-done in the context of (a) a cost of living crisis and (b) increased environmental awareness, i.e. people aren't that keen anymore on taking £50 domestic flights from London to Glasgow, but at the same time may not be able to fork out the current sleeper cabin (solo occupancy) prices.

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and het the sleeper is full most nights…

Bald Rick said:

and het the sleeper is full most nights…

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Full in terms of berths or full in terms of cabins having at least one occupant?
I think you mentioned an "educated guess" re berth occupancy up-thread, but the actual data would be interesting...
Anyway, the discussion is at risk of becoming a bit circular. All I will say is that CS - and Night Riviera before someone mentions them- are (to my knowledge, but I'll stand corrected) the only night trains in Europe where a strict "sharing with strangers is taboo" policy is operated, and it strikes me as a bit bizarre.

Of course you can say that CS doesn't need "people willing to share" as an extra revenue source, but if we look at it from a perspective of getting more people to travel by train instead of plane, the arguments become a bit different

snowleopard said:

but if we look at it from a perspective of getting more people to travel by train instead of plane, the arguments become a bit different

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but not a lot different. If such a sharing policy was introduced, the number of additional travellers the sleeper could take who woudl otherwise have flown would barely fill a few rows of an A320.

By far the easiest and most cost effective way of encouraging more people to use the train rather than plane from London to Scotland is to recast the ECML timetable…

Bald Rick said:

and het the sleeper is full most nights…

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Philosophical question - what is CS for? Why do we subsidise it? Is its purpose to be a rich person's plaything ("the Deerstalker") or is it providing an essential public service?

snowleopard said:

but if we look at it from a perspective of getting more people to travel by train instead of plane, the arguments become a bit different

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Unfortunately the UK government (who ultimately hold the purse strings, whatever Holyrood might prefer) have no intention of achieving modal shift from air to rail. If they did they wouldn't have cancelled either of the legs of HS2.

HSTEd said:

Well it would increase profitability in the sense of reducing operational losses, simply because less money would be burned on un-renumerative services.

But by that standard the best way to improve profitability would be to give up entirely and cut losses to zero!

We have a fundamental problem in that, given the limitations of our available loading gauge, train length and staff costs, that the passenger density in sleepers can't be high enough to justify the operational expenditures to run them.
If we could run 500m long trains of Superliner sized vehicles it might be different.

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I wouldn’t advocate getting rid of the Inverness or Fort William Highlander legs, due to the lesser travel options to those destinations.

But, for me; the Lowlander can go, and as can the Aberdeen portion of the Highlander. These would both provide cost savings without causing too much loss to passengers and having little social justification for subsidies. The freed up rolling stock could strengthen the remaining Fort William/Inverness service and/or be cascaded to replace the Night Riviera Mk3’s.