Bold Fares Plan Outlined

13th November 1959, Page 145

13th November 1959

Page 145

Page 145, 13th November 1959 — Bold Fares Plan Outlined

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Keywords : Fare, Pricing, Viva

NEW legislation would not be needed to make the control of fares more flexible. Only a new interpretation of the words "not unreasonable" in Section 72 of the 1930 Act would be required.

This was claimed by Mr. A. F. R. 7,arling, executive of the B.E.T. Co., Ltd., vhen he read a paper on fares structures o the Institute of Transport in London in Monday. He made a bold new .pproach to his subject.

Section 72 refers to fares conditions ittached to road service licences, and the .voidance of wasteful competition.

"I can see nO reason why all road vperators, subject in competitive situaions to prior agreement, should not be

• ntitled by licence to reduce any of their cheduled fares experimentally. To coninue a reduction beyond, say, one year, substantive application would be 'ceded to bring the reduction within the cheduled fares," said Mr. Carling.

Such freedom would restore imaginaion and adventure to the lives of traffic nanagers. For the past decade they had wen condemned to the dismal task of epeateclly raising fares within a framevork of narrowing uniformity, in lesperate but belated endeavours to keep itice with the diminishing value of ooney.

Cheap Returns . • Much scope might be found for experitient. Empty seats in the evenings might ie filled by cheap return fares. The use d more distant shopping centres might he ncouraged by "bargain returns" in i(f-peak hours. Lightly loaded journeys

o and from resorts at out-of-season veek-ends might be improved by special ixeursion fares.

Traffic managers would also discover hat a fares structure was not a thing of ,bsolute rigidity and capable only of .rithmetical adjustment to produce extra evenue to meet higher costs.

Operators should have limited power to aise fares, subject to: (I) the Cornnissioners being satisfied that there was a orima facie case for the exercise of the liscretion allowed by the licence; and 2) the new fares being covered by an ,pplication to the Commissioners within, ay, three months of their introduction. The Commissioners would not lose heir essential control, and the repreentatives of the travelling public their ights. All that would be lost would be he delay in adjusting fares.

Earlier he had emphasized that the ize of passenger-transport undertakings iaried from the independent individual to ;roups of nationalized companies. leparate undertakings enjoyed the benefit if working to individual profit-and-loss .ccounts. It was by the continued ixistence of separate accounting units that he perils of averaging fares over too wide .n area were avoided. Charging was wevented from straying too far from the iasis of cost. The local nature of small undertakings allowed the realistic fixing of fares in another way. The normal absence of through bookings from one service to another made it easier for the operator !-o watch receipts per car-mile on a route basis.

Although the Commissioners in recent years sought to encourage . greater uniformity in the pattern and level of fares within each undertaking, they had not , generally attempted to standardize fares structures between different areas. No standardization had been attempted between separately controlled systems within the same area, other than on routes where the services of more than one operator overlapped.

Thus, said Mr. Carling, there was an enormous number of differences within fares structures in this country. They arose from differences in geography, densities of population, circumstances of competition (past and present), and the theories held by the various operators and Commissioners.

Mr. Carling confined his temarks to stage services a..n.11 pointed out that • although many routes were long, they were not concerned primarily with local • traffic. Long routes cut down unproductive turn-round time, gave useful additional facilities and therefore revenue, but their main function was nearly always local.

Ribble and Southdown He gave two examples. On the Ribble 531-mile Lancaster-Keswick route, the average fare was 81d. This represented. an average journey of approximately five miles. On the Southdown

Brighton-Southsea service via Worthing, Bognor and Chichester, the average fare was 6.35d., which represented an average distance between three and four miles.

It had long been the practice to taper the rate of charge with distance, but tne degree of taper had tended to become more pronounced in recent years.. The most common minimum fare in pre-war days was Id., which was the usual price for a one-mile ride.

Today, 'the fare for a similar journey was sometimes 2d., but more often 24d. or 3c1,—an increase of 150 or 200 per cent. Over longer distances, the rise had not often exceeded 100 per cent., unless . the old fare was subnormal.

Many of the costs of carrying a pas7' senger did not increase with distance. For • example, the driver had to stop for him only for boarding and alighting, whatever the length of the journey, and only one ticket had to be issued. Moreover, the shortest journeys were most often made at the end of a route where traffic was heaviest and operation costs tended to be highest.

The saving from a return fare, compared with two singles, had tended to be reduced in comparison widrpre-war days. In some areas, the return had been eliminated but, said Mr. Carling, "in my view the airlines have judgeethis matter nicely. A return fare at a cost of 180 per cent. of two singles seems to achieve the maximum advantages from returns with least loss of revenue." Some bus operators were very close to this, he added, with a ratio of 173 per cent.

The season ticket had a number of advantages for the operator, who need not sacrifice much regular revenue if the rates were kept fairly close to the cost of five ordinary retnrn journeys a week.

Extra journeys at week-ends made by holders would probably be cancelled out by odd days of sickness or holiday, or the benefit of lifts from car-owning friends. Peak-hour 'pressure on conductors was reduced, with less chance of other fares being missed.

Rigid Fixing All fares of whatever category were within the jurisdiction* of the COMIlliSsioners, but they should not fix all fares with such rigidity that operators could

not adjust thein .except lengthy processes.

Today almostevery fare was absolutely fixed—regardless of competition or cost of operation. "This state of affairs appears to me to be not only undesirable but indefensible," said Mr. Carling.

Mr. Carling's paper. was part of a symposium. Dealing with rail fares, Mr. A. W. Tait,. assistant general manager, Eastern Region of British Railways, .said that their present structure was going through an evolutionary process. It must. face further, adaptation if it were to safeguard the survival of railway passenger services in a rapidly changing world.

An interesting development in recent years had taken place on local provincial services outside London. Most of the fares on those routes no longer had any defined relation to the rest of the structure, but were determined by the level of local bus rates.

Mr. J. L. Grumbridge, general commercial manager, British European Airways, -said that the domestic air system was fortunate to have fares controls which were less restrictive than those for rail and road.

The B.E.A. network had no rates per mile, nor point-to-point fares imposed by statute or authority. Nor, indeed, was there any specific obligation to clear fares proposals with a Ministry. However, this freedom has been voluntarily abjured.

The report from the Select Committee on Nationalized Industries made it clear that B.E.A. had accepted a situation in which they sought the Government's approval when wishing to change any domestic fares.

Bold Fares Plan Outlined

Page 145

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