UK Rail Revenue Climbs to £11.5B, Passenger Demand Boosts Fares

Great Britain’s rail network saw an 8% surge in train fare revenue, reaching GBP 11.5 billion for the fiscal year April 2024 to March 2025, driven by a significant recovery in passenger demand. Despite this financial uplift, total fare income remains 12% below pre-pandemic levels, highlighting ongoing financial challenges for the sector.

The latest figures from the Office of Rail and Road (ORR) indicate a robust return of passengers, with 1.7 billion journeys undertaken across the network. This resurgence in travel has translated into a notable increase in train fare revenue. However, the industry’s financial recovery is not yet complete, as fare income still lags behind 2019 figures by a significant 12%, despite passenger numbers returning to pre-pandemic volumes.

Regional Performance and Average Fares

Regional operators spearheaded the revenue growth, achieving an 11% increase. London and the South East also saw substantial gains, with revenue rising by 8%, closely followed by long-distance services which experienced an almost 8% uplift. The average fare per journey saw a marginal rise to GBP 6.65. While this represents a slight increase, it remains GBP 0.82 lower than the average fare recorded before the pandemic.

Government Funding and Subsidy Levels

The enhanced fare revenue has contributed to a reduction in government funding required for the day-to-day operation of the railway, decreasing by GBP 0.9 billion year-on-year to GBP 11.9 billion. Despite this reduction, state support continues to play a crucial role, accounting for nearly half of the railway’s operational income and significantly exceeding pre-COVID levels. Subsidies vary geographically, with passengers in Wales receiving the highest subsidy per passenger kilometre at 45 pence, followed by Scotland at 34 pence, and Southern and Eastern England at 16 pence.

Industry Income and Expenditure

Overall industry income for the sector experienced a 1% decline, settling at GBP 25.9 billion. Fares contributed GBP 11.5 billion to this total, with other sources adding GBP 1.8 billion and non-fare operator income amounting to GBP 0.7 billion. Network Rail property income saw a substantial drop of 32% to GBP 286 million, largely attributed to a slowdown in asset sales. Operational expenditure, however, saw a 1% increase to GBP 26.0 billion. Costs for franchised passenger operators rose by 4.6% to GBP 13.4 billion, driven by increased staff expenditure (up 6.1%) and higher rolling stock and operating costs, with staff numbers growing by 4.6%.

Infrastructure Investment and Private Sector Involvement

Spending on rail infrastructure enhancements and rolling stock fell by 4% to GBP 10.3 billion. A significant portion of this, GBP 7.1 billion, was allocated to the HS2 project, although funding for HS2 saw a slight decrease due to programme restructuring and scope changes. Network Rail enhancements accounted for GBP 2.1 billion. Encouragingly, private investment saw a substantial increase of 27%, reaching GBP 756 million. The majority of this private sector investment, GBP 525 million, was directed towards new or upgraded rolling stock.

Operator Dividends and Rolling Stock Leasing

Financial performance for franchised operators also presents a mixed picture. Ten out of twenty franchised operators were expected to pay dividends, totalling GBP 164 million, a slight decrease from the previous year and approximately half the level seen pre-pandemic. Rolling stock leasing companies experienced a dip in net profit margins to 19%, and dividend payments to shareholders fell by 19% to GBP 275 million.