(The Canadian Press circulated the following on October 20.)
OTTAWA — A controversial campaign to fill Via Rail trains with military families during the summer boosted revenues at the Crown corporation by about $900,000, internal documents show.
But the freebie offer still leaves Via Rail — which ran a $200-million deficit last year — a long way from profitability.
More than 58,000 tickets were issued under the special promotion, which allowed Canadian Forces members, veterans and civilian workers at National Defence to ride free in July, while family members paid half price. Kids travelled free.
Via Rail estimates all those tickets were worth about $4 million retail, with revenues per ticket on average less than one-quarter of the regular price.
But for the last seven years, ridership has been dropping markedly in July. The corporation had been looking for a way to increase summer revenues and fill half-empty trains.
“The challenge was to create an offer that would stimulate trial (ridership) in July in order to reach the budgeted passenger and revenue targets,” says a Sept. 3 internal report by Pierre Santoni, senior director of national sales.
“This had to be accomplished in a short period of time, without any marketing or advertising dollars to support the offer (in order to have a) better cost ratio.”
The report and other related documents were obtained by The Canadian Press under the Access to Information Act.
Via Rail also expected the promotion — limited to economy-class seats — would force more customers to upgrade to first-class as the cheaper tickets sold out. The campaign would also expose more people to rail travel and encourage them to come back at full-fare in the future.
In the end, the freebie campaign netted $783,437 directly and another $133,386 in so-called spinoff revenue — tickets for which travel started in June or ended in August, so that the non-July portion of the fare was at full-price.
The program “surpassed all objectives,” Santoni wrote, partly because “an unprecedented amount of media and press value was generated without any advertising (spending) by Via Rail directly.”
The freebie offer was announced with fanfare March 26 at the Halifax railway station, touted simply as a way for the Crown corporation to say thanks to military personnel.
But internal documents later showed that the campaign was partly a hard-boiled business decision to increase cash flow in the summer doldrums.
Some military families also objected to the July time frame, noting that soldiers serving in Afghanistan during the summer — the very people Via Rail said it wanted to thank — could not take advantage.
In the end, the promotion appears to have boosted July revenues by about four per cent, Santoni’s report says.
Via Rail spokesman Malcolm Andrews cautioned that the corporation had already seen stronger revenues in the first six months, and July’s improved numbers could be attributed to several factors, not just the military passengers.
“It’s too soon to say whether Via will repeat the same promotion,” Andrews said. “We are always looking at innovative ways to attract people to travel by train.”