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INFORMED SOURCES March 2000

Stelios rattles Sir Richard's cage

Virgin Trains is clearly worried by the resurgence in domestic air travel on it's key routes – with good reason

When I was young and all the world was new and the West Coast Main Line was being electrified, my employers occasionally let me fly to Liverpool, rather than travel down the night before for morning meetings. Then, electrification and the sparks effect pretty well wiped out the domestic airlines on routes like London-Liverpool and London-Manchester. But now they're back and causing the train operators real concern.

Paradigm shift

Two factors seem to account for this resurgence. First, the combination of the 1990 recession followed by privatisation resulted in a lost decade for the railways. Second, air travel experienced a step-change, or what business-speak would term a ‘paradigm shift', in the form of the low cost airlines.

Of course, there were cheap flights before, but these were hedged about with conditions and restrictions, a bit like train fares today. But then Ryannair, EasyJet and Virgin Express broke the mould.

Old airline

I hadn't twigged the true nature of the paradigm shift until I started planning a day out to see the current Fauvist painting exhibition in Paris . Buzz, KLM's new low cost airline was offering £50 returns Stansted-Paris, flying into de Gaulle airport. So I logged onto their web site and discovered, to my chagrin, that the £50 return applied only if you spent two nights away. Otherwise , a day return would be £99 each.

Similar restrictions apply for the cheapest tickets with Go, BA's ‘low cost' offshoot. From which it is clear that BA and KLM have lost the plot – or, rather, stuck to the old plot. Their new business are not true low cost airlines, but cheaper conventional airlines, with all the complexities still in place.

What the real low-costs offer is an uncomplicated booking system. You want to travel on a certain day? Here are the flight times, here are the prices available, take your pick and travel – and the earlier you book the more likely the biggest discount is available. On top of which travel is ticketless.

Anyway, when EasyJet launched their three times a day Luton-Liverpool service last year, my immediate reaction was that we, the railway, had let the opposition back in after years of dominance. London-Edinburgh, London-Glasgow – fine. But London-Liverpool?

And, rather naughtily, Easyjet made it clear that Virgin's customers were its main target when the launch advertisements referred to West Coast fares as ‘The great train robbery'.

Now, Virgin and the Saintly Sir Richard are well known as the consumers best friend and a bastion against entrenched interests. So in January Virgin launched a head on advertising campaign in the London Evening Standard aimed at business travellers to Liverpool and Manchester .

Tit for tat

Business travellers, you may ask? Aren't the low cost airlines aimed at backpackers and the like?

Well, last year we (me and Mrs Deltic) flew Easyjet for a cultural day out in Amsterdam . £110 return for two compared with nearly £200 for a shorter time in Lille , our original target, with Eurostar.

We caught the 06.35 off Luton and the adjacent desk was check in for Easyjet's 06.30 flight to Geneva . Barely a backpacker in sight, but long queues of business suits and briefcases from Vauxhall, our local pharmaceutical giant and other Herts and Beds residents.

And here is another advantage to the low cost airlines. They fly Boeing 737s. Not as ‘luxe' as a good train, but what business travellers are used to and the ambience is airline, but without free food. Quite acceptable for a 55 min flight time.

Riposte

But back to the Virgin advertising campaign. First came a four page pull out, led off by an excruciatingly naff ‘advertorial' page. Headed High flyer ditches plane and nets two free train tickets it opened ‘The city shook last night at the announcement of a new deal from Virgin Trains that's set to rock the business travel market. The new deal offers anyone currently flying between London and Manchester or Liverpool two FREE First Class weekend tickets if they buy a First class train ticket for travel on business on either route before 15 April 2000'.

According to Virgin train's advertising agency ‘This means that business people will have to seriously re-think about how they travel to their next meeting'. ‘In your dreams' seems the only appropriate response.

Other gems of the copywriter's art include mythical ‘experts' reporting a 1 hour city centre to city centre time saving for the train over plane on the two routes and an equally mythical ‘disgruntled ex flyer' ‘quoted' as saying ‘It's plane crazy when you consider that flights aren't city centre to city centre. To go from London to Liverpool you have to go all the way to Luton which is miles away'

Well, not if you happen to live in Bucks, Herts, Beds or Essex . Which is a more likely place for ‘business brains' to live than Eversholt Street .

Of course, the Luton Airport reference was the give away, if one were needed, that brave little Easyjet was the target . And the next day the Standard carried a whole page advert in Easyjet's distinctive orange, but headed Queasyjet (ho ho). A roundel proclaimed ‘ London to Manchester and Liverpool from £5 each way'. Under it was the headline ‘Not everyone appreciates our low fares'. The body copy claimed that going by rail would save 'about an hour' city centre to city centre and ‘well over £20'.

Presumably this advertisement complemented the previous day's venture and was aimed at the economy traveller. Because on 24 January another business oriented advertisement appeared offering a ‘great deal… quicker'. This reprised the original weekend first offer with the slogan ‘Ditch the plane and get Free First Class train tickets'.

All this in response to EasyJet's three planes a way each-way, which seemed odd given that Liverpool is not Virgin's plum destination in the 2-3hour journey time band where rail ought to have the competitive edge. So I decided to look at other routes.

Competition

Some quick surfing showed that the air competition on London-Manchester is intense, with British Midland and British Airways both offering two hourly-ish service frequency throughout the day and BA offering this frequency from both Heathrow and Gatwick plus three flights a day from Stansted.

But on these routes there is clearly no low cost airline competition. London Manchester return on BA is £197 while BM at £160 matches Virgin Trains' latest standard walk-on return fare. So it looks as though Virgin's blast at Easyjet on the less lucrative route was a combination of ego (the ‘great train robbery' jibe) and real competition rather than the cosy club on London Manchester.

It will be interesting to see what happens to fares when the Government imposes the £20 airport tax on internal flights. Current flights leaving the country are taxed £10.

Oh yes, and Easyjet had the last word in the Liverpool punch up. It quoted newspaper reporters' real life journey time comparisons in its favour – plus one Christopher Green who told the press that EasyJet ‘had the speed advantage for the moment'.

However, tit for tat is not a viable substitute for railway fares policies to match travellers expectations in the 21 st Century – expectations which the true low cost airlines understand and use to make travel simple. When is a train operator going to make travel as affordable and simple?

Table 1

Table 2

London-Liverpool – the business brains' options

Booking a journey for the day after tomorrow in mid January.

Out Return Return Fare(a

Dep Arr Dep Arr

Easy Jet 08.10 09.05 19.40 20.35 £30.50

Virgin Trains(b) 06.46 09.37 18.10 21.09 £37.00(c)

£188.00(b)

•  Travel day after tomorrow. Includes £10 each way airport tax.

•  Train from Watford

•  Virgin Value

b) Open First

Table 3

Continues.........