Competitive strategies for railways in the UK: a corporate perspective

As part of a trend towards increasing the involvement of the private sector in railway operations, Britain's passenger railways were franchised in 1996 - 97. This followed the fragmentation of the erstwhile nationalized British Rail into an infrastructure owner (Railtrack, itself privatized in 1994), train operating companies (TOCs) and a host of other organizations. Included among these were freight operations that, despite initial suggestions, were sold primarily in only two lots. Although there have been analyses on this privatization process, including (importantly) from the passengers'/customers' point of view, one perspective that has remained under reported has been from the corporate perspective. With 25 different TOCs (even if ultimately owned by only 13 different organizations), there is ample ability to demonstrate a wide range of corporate behaviour. This paper sets out to demonstrate that a varied response to railway operating is indeed being pursued by a range of TOCs. First, the characteristics of the passenger railway sector are considered, both from a management and an economic viewpoint. A brief historical section then enables the different strategies being adopted by a number of companies to be looked at, and to conclude that some of these are more likely to be successful than others.