Released to press 28/3/2013
KiwiRail has announced that it will continue to operate the Capital Connection rail service between Palmerston North and Wellington for another two years, before making a final call on whether or not it will be closed.
KiwiRail’s General Manager, Passenger, Deborah Hume says the future of the Capital Connection had been in the balance for more than six months.
“During KiwiRail’s various discussions with a number of parties to look at options to fund and manage the service in the future, strong support for the train was expressed from many in the geographic market it serves.
“Growing patronage will be crucial for the survival of the train. If we don’t have continued support and additional passenger growth, the commercial viability of the service becomes very challenging. If we don’t have enough people using it to cover the cost of running it, the service won’t survive.
“We ask customers and the respective councils to advocate within their communities to increase patronage and translate the strong calls to retain the service into more people using it every day.”
The service will be reviewed again in June 2015.
To minimise the losses the service is currently making, KiwiRail will continue to run the Capital Connection with a minimum of capital investment, along with annual fare increases, with a view to seeing if the service can at least break even, Ms Hume says. Marketing will continue.
“An annual review of the service will be conducted and KiwiRail is committed to continuing the service until June 2015, unless annual losses exceed $1 million.
“In order for KiwiRail to break even by 2015, daily patronage needs to have increased by 61 passengers in each direction and the average ticket prices need to be 40 percent higher. In practice that will see KiwiRail attempting to grow patronage while increasing fares about 10 percent year-on-year.
“We know this will be very challenging,” says Ms Hume.
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