Armitt (I think it was) was on R4 this morning explaining that it's an ORCATS raid - and the taxpayer will bear the cost: They might make £9m from fares, but stand to get £22m from the other operators... who are publicly-funded, so it's a transfer of money from us to the Virgin empire.
If he mentioned the words ORCATS raid, then he doesn’t know what he is talking about. It won’t be an ORCATS raid - that is so last century.
ORCATS raiding is when you timetable your trains in front of a competitor so you gain their revenue from IA (Inter Available) tickets through the ORCATS algorithms allocating you a bigger % of the relevant flow revenue through Lennon, irrespective of whether you carry the passengers or not.
With the vast majority of journeys now AP, on the major main lines you bypass the % allocation process as 100% of the AP revenue always goes to you. It leaves now a very small % of IA left for anyone to try and ORCATS raid, certainly not what you would base any business plan on.
What I suspect is really being talked about here is competitive abstraction from the public purse through a competitor taking revenue off a state run incumbent via ordinary (and legal) competitive behaviour.
Allowing OA only on the condition they are not fare abstractive is a fair practice...in theory. Lumo I doubt is a part of LNER (DfT) hiking their prices up massively - they would have done it anyway . Even the Hull Trains revenue will come from Grantham and Doncaster tickets as much as Hull - London so will be astractive in part.
No, HT only get a small % of total Grantham and Doncaster revenue. The revenue for HT from these stations is very much outweighed by that from the East Yorkshire stations, the take from Hull and Brough alone being in excess of those two.
Abstraction is where you take out and not put anything back in. But if you put back so that the incumbent is not financially disadvantaged in the medium to long term, then there is no net abstraction. A good and clear example of this is Hull Trains. Other OA operations, arguably less so.