JR East’s Raise in Fares: Use Improved Earnings for Safe Operations

Editorial

15:08 JST, December 10, 2024

Safe operations are of the utmost importance in the railroad business, which supports people’s daily lives. It is hoped that the improvement in earnings resulting from fare increases will be linked to passengers feeling a greater sense of security.

East Japan Railway Co. (JR East) has applied to the Land, Infrastructure, Transport and Tourism Ministry for a raise in its fares starting in March 2026. The average increase will be 7.1% for all areas within its jurisdiction.

Excluding fare increases due to consumption tax rate increases and other such factors, this is the first time since 1987, when the former state-run Japanese National Railways was privatized, that JR East will entirely revise its fares. The fare increases are expected to raise the company’s annual earnings by ¥88.1 billion.

In April this year, the ministry made the rules for calculating fares more flexible to make it easier to cover the costs of investments in safety measures and disaster recovery efforts.

JR East states that the reason for the fare increases, amid continuing high prices, is to ensure the cost of maintaining safe railway transportation and to promote the renewal of train cars.

The company says that capital investment costs are about ¥450 billion each year due to the aging of railroad infrastructure and the intensification of natural disasters caused by extreme climate events. It will be important to steadily allocate the greater earnings from fare increases to the strengthening of safety measures.

In September, JR East experienced a problem when a coupler joining cars of a Tohoku Shinkansen bullet train came off while it was running. It has also come to light that the company falsified data in the process of installing wheels and axles in the past.

Improved earnings will need to be allocated not only for maintaining facilities, but also for measures to secure and teach personnel, in order to thoroughly prevent the recurrence of such problems. The installation of platform sliding doors and the building of earthquake-resistant railroad facilities should also be hastened.

With the revision of its fares this time, the base fare on the Yamanote Line will increase from the current ¥150 to ¥160.

The fare between Tokyo and Yokohama will increase by ¥40 to ¥530. Commuter passes will see an average increase of 12%. In consideration of competition with other private railways, the fare structure, which has been kept low, will be reviewed. On the other hand, taking into account the increased burden on household finances, commuter passes for students taking local and other routes will remain unchanged.

Since the impact on passengers will be significant, it is hoped that JR East will make efforts to thoroughly explain the circumstances behind the fare structure changes, in addition to the fare increases.

Since the outbreak of the COVID-19 pandemic, the railroad business has been forced to undergo major changes due to the introduction of telecommuting, which has led to a decrease in the number of commuter pass users, among other reasons.

JR East’s passenger transport level in fiscal 2023 remained at less than 90% of the fiscal 2019 figure. Local lines, which are seeing a decrease in passengers, posted a deficit of ¥75.7 billion in fiscal 2023.

Under such a severe business environment, a move to increase fares is spreading to other operators, including Kyushu Railway Co., Hokkaido Railway Co. and other private railway companies.

Fare increases, in some respects, are causing people to use trains less. The diversification of earnings will be an issue to be addressed in order to maintain train route networks.

(From The Yomiuri Shimbun, Dec. 10, 2024)