SOPHISTICATED REVENUE management of the sort normally found in airlines is increasingly finding its way onto Britain's railways.
Suzanne Donnelly, East Coast's head of revenue, joined the rail sector in 2005 after 11 years at Bmi and is based in York with a small team of analysts. East Coast uses a piece of technology called Revenue Price Manager (RPM) to help set its fares. It was originally developed for Eurostar by JDA but East Coast uses a highly customised version.
Donnelly says setting the fare is 80 per cent automation and 20 per cent human intervention from a skilled team of analysts who react to information such as whether there are special sporting or cultural events happening which increase demand. They also react to what competitors are doing.
Like traditional airfares, rail fares are priced in fare 'buckets', with a fixed number of seats available at various prices. Once all the tickets in the lowest fare have sold, customers are then directed to tickets in the next higher fare bucket. Rail fares go on sale 12 weeks before departure and the price can be adjusted up to 28 times between then and departure, although not all fares change at every possible point.
"We generally increase the price as we get closer to departure," Donnelly says. RPM automatically pushes the prices up as the departure date approaches if no-one intervenes. In some respects rail revenue management is more complex than for the airlines. The same seat may be sold to more than one passenger between the origin and destination.
On top of that, there is the small matter of regulation. "You don't have total freedom," says Donnelly. "You have to offer regulated off-peak fares during the week and all weekend. In the airline world, you would never have that constraint. On a flight to Edinburgh during the festival, when demand was high, you could keep putting the fare up. On the trains, you have a regulated cap."
Donnelly says business travellers are changing how they buy rail tickets: "We have see a real change in behaviour. Businesses are moving away from fully flexible fares to more restricted fares and buying a lot further in advance than they ever did. All these new dynamics have appeared over the past two years."