The UK government has suspended rail franchise agreements for six months and agreed to assume all revenue and cost risk posed to operators, after railways experienced a 70 per cent drop in passenger numbers following the advent of coronavirus.
Rail operators such as Go-Ahead Group (GOG) have warned in recent weeks that the pandemic was affecting travel patterns, particularly in areas exposed to tourism. The government said that ticket sales are down two-thirds from this point in 2019.
Services will be reduced and passengers holding advance tickets will be able to obtain a free refund. Fees will be set at a maximum of 2 per cent of the franchise’s cost base before the crisis began, which transport minister Grant Shapps told parliament would “incentivise operators to meet reliability, punctuality and other targets”. The minister added that “the maximum fee attainable will be far less than recent profits earned by train operators”.