RAILWAY PROFITABILITY AND STATION CLOSURES

Document Type

Journal Article

Publication Date

1997

Subject Area

operations - traffic, infrastructure - station, planning - route design, economics - operating costs, economics - profitability, economics - profitability, organisation - privatisation, organisation - privatisation, place - low density, mode - bus, mode - rail, mode - subway/metro

Keywords

Underground railways, Train traffic, Subways, Subway stations, Suburbs, Routes, Railroad transportation, Railroad traffic, Railroad stations, Rail transportation, Profitability, Privatization, Privatisation, Operating costs, London (England), Linear programming, Cost of operation, Business practices, Branch termani (Railroad)

Abstract

Currently, there is considerable debate on railway ownership, with privatizations occurring in a number of countries. Against this background, the management of London Underground Limited (LUL) wished to comprehend the likely behaviors of possible future owners, particularly any following a strategy of profit maximization. This paper is concerned with the network or geographical implications of any such strategy. Two elements of the network were examined: first, branch termani; and second, suburban stations on core routes. Although it might be desirable to close branch termani, operational reasons such as the location of depots prevent this in some cases, but analysis was carried out for the remainder. Poorly-used suburban stations were also examined; a simplified linear programming approach was used to identify those stations where traffic levels were insufficient to cover operating costs and the disbenefits to through passengers. These calculations were carried out for a number of scenarios, including short- and long-term, and benefit and profit maximization. Although much of the network is sustainable in the short term, or under benefit maximizing conditions, it was shown that only about 50% is financially profitable in the long term.

Comments

Transport Policy Home Page: http://www.sciencedirect.com/science/journal/0967070X

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