Railway Industry in France

TGV 1

1. Industry Overview:

In France, one of the most popular transport modes is train.  SNCF is France’s national railway, providing high speed, overnight and local services in France and beyond into Spain, Switzerland and Italy.

>> http://www.tgv-europe.com/en

Types of Train in France:

01-TGV

02-Lunea

03-Teoz

04-TER

06-Intercites

Railway industry is quite similar to airline industry, as it sells seats for a transport from an origin to a destination. The price depends on journey, class, and date of booking. Thus, railway industry can be placed in Quadrant 2, where its service has variable prices for a predictable duration. This industry also has the appropriate characteristics to apply revenue management strategies. Those characteristics are:

– Inflexible capacity: the number of seats on a train is fixed

– Variable and uncertain demand: the demand is different depending on the time of day, day of week, origin-destination pairs, and purpose of travel

– Perishable inventory: the unoccupied seat cannot be inventoried, and the revenue of that seat is missed

– Low marginal cost and high production cost

– Product can be sold in advance

– Heterogeneous customers with different segments, varying by age, purpose of travel, independent or group, etc.

However, there are some differences that make the revenue management of railway industry is little bit different than that of airline industry.

More difficult to forecast demand and to have the accurate number of travelers on a service: no check-in procedure, open tickets (rail pass) generally allow passengers to travel on any rail service, walk up tickets are very common (a large number of passengers purchase their tickets on the day from the station)

Less difficult to deal with overbooking: passengers are often allowed to stand during train journeys hence increasing capacity beyond the number of seats

———

 2. Space

Railway industry defines space implicitly.

Normally, a train has two classes: Economy (2nd Class) and Comfort (1st Class). The seating options and services are different for each class. The price is same for different seating options in a class.

 Economy Class:
01-Class2
 Comfort Class:

01-Class 1

Trains, especially TGV has “TGV bar”, which provides a wide selection of meals and sweet snacks available for purchase. Additionally, the TGV bar offers films on DVD, magazines, games for children, Paris Metro tickets, even USB sticks for purchase. There is also a rolling snack cart that comes to the customers’ seats.

01-TGV Bar

For additional revenue, TGV offers Premium service includes 1st Class seat, meal service, and access to the TGV lounge at the train stations.

Personally, I would charge difference fares for different seating options in each class. A group will want to pay more to have a Club 4 seat. A couple will want the Duo seat or Club 2 seat. And an individual traveler will want a solo seat. As the number of seat are fixed, we can charge for each option, rather than a “first comes first served” policy.

I’m also thinking about a mini-cinema on train, especially overnight train. Normally, the overnight train have load factor less than 80%, so the train can use one car to transform into a mini-cinema with a projector and a screen. When the train is busy, the car will be transformed in normal guest car again.

——

3. Time

Railway industry defines time implicitly.

Although the duration of a journey is determined, the railway industry sells a journey rather than specifically selling time. In addition, there may be issues that cause the increase/decrease in duration of the journey.

However, the railway industry also tries to sell time explicitly with the Rail pass. With Rail pass, customers can have unlimited travel on the national rail network of France for a fixed number of days. The choices are 3, 4, 5, 6, 7, 8 or 9-day pass within a one-month period. Travel days may be used consecutively or non-consecutively.  Thus, the fare becomes rate-per-day, not anymore rate-per-trip.

>> http://www.raileurope.com/rail-tickets-passes/france-pass/index.html

The industry can sell time explicitly by providing Rail pass with weekly or monthly unit. However, I think it will not be effective as it makes the demand forecasting much more complicated.  Half-day unit won’t make sense as a trip is normally more than 3 hours.

——–

4. Price

Tickets can be purchased 60 to 120 days in advance depending on the route.

Ticket discounts are based on advance purchase, availability, and certain restrictions. Everyone is eligible to receive discounted fares by purchasing an Economy or Comfort class ticket in advance. Youth and seniors can enjoy specific discounts as well. Discounted tickets are available for youth (under 26 of age), seniors (age 60 and over) and children (generally ages 4-11) but should be verified with each product.

Price at 1 week before departure
01-Price-1st class-10AM-1wk

Price at 2 weeks before departure

01-Price-1st class-10AM-2wk

Price at 3 weeks before departure

01-Price-1st class-10AM-3wk

Price at 4 weeks before departure

01-Price-1st class-10AM-4wk

Normally, prices are reduced for 1or 2 week-advanced purchase, slightly reduced for 3-week-advanced purchased, and stay same for more-than-4-week-advanced purchase.

The physical rate fences are the classes:
01-Booking-Class

 

The non-physical rate fences are age, season ticket, and loyalty

01-Booking-Rate Fences-1

01-Booking-Rate Fences-2

01-Booking-Rate Fences-3

01-Booking-Rate Fences-4

As the rate fences are now already too sophisticated, I would rather consolidate these fences than create new fences to confuse customers.

 

(-Thao Ly)

——–

References:

http://www.raileurope.com

http://www.tgv-europe.com

http://www.sncf.co.uk/

Amstrong and Messneir, 2010. Railway revenue management: Overview and Methods

Schroeder, Braun, and Schnieder. Revenue management in the railway industry

 

157,674 thoughts on “Railway Industry in France

  1. I do accept as true with all the ideas you have introduced on your post. They are very convincing and can definitely work. Nonetheless, the posts are too quick for newbies. May just you please lengthen them a bit from subsequent time? Thanks for the post. cloud managed services

  2. This is such a great resource that you are providing and you give it away for free. I love seeing websites that understand the value of providing a quality resource for free. It is the old what goes around and comes around routine.
    Comprehensive Wellness Solutions

  3. Kubet là một trong những nhà cái cá cược trực tuyến phổ biến tại Việt Nam. Nó cung cấp một loạt các trò chơi cá cược, bao gồm cả cá cược thể thao, game cược trực tuyến, xổ số và các trò chơi trực tuyến khác.

  4. Alternatively the value of the service based business can be calculated on the value of the service being provided in a consultancy capacity which is evaluated against the insights the said service will bring to the company with the intention of creating a system thereby the said company is able to save or be more cost effective. delta roofers

  5. Zaman Safi FZE is one of the UAE’s acceptable appraised sites for purchasing affirmed utilized new and land crusier price in uae cars, Kenya, Uganda, Tanzania, Zambia, and Malawi.

    With thousands of vehicles to browse, you can be guaranteed that you will track down the right trade-in used cars that meets your definite necessities, regardless of whether it is from a confirmed vendor or private dealer. We have every one of the significant brands including Toyota, Nissan, Honda, Mercedes, and a lot more! All vehicles from private vendors are pre-examined with complete outcomes including pictures down to each scratch accessible on the web.

  6. I am upbeat to locate your recognized method for composing the post. Presently you make it simple for me to comprehend and execute the idea. Much obliged to you for the post.  bridal thongs

  7. Hello. Cool article. There’s an issue with the website in internet explorer, and you might want to test this… The browser is the marketplace chief and a large element of other folks will miss your great writing due to this problem. 에볼루션카지노 가입

  8. Join the Botogon trading community to engage with like-minded traders, share insights, and collaborate on strategies to enhance your trading journey. Whether … forex robot

  9. Many homework on the continual hunt along with offstage on the road to winning. Definitely not attached, simple to-fall as a result of wayside; And not investigation, afterward into a path travel toward the black. mrs shirts for the bride

  10. I really enjoyed your blog post. I found your insights helpful and I especially appreciated the way you described it. Your blog post gave me some great ideas. Thanks for sharing your thoughts!

    tvs king duramax price

  11. TOPSPIN88 telah menjelma sebagai mitra taruhan terdepan bagi para penggemar judi daring, khususnya bagi mereka yang menggemari Slot88. Dengan fokus pada memberikan pengalaman taruhan yang mengasyikkan dan menguntungkan, situs ini telah menjadi destinasi unggulan bagi para penjudi online.

Leave a Reply

Your email address will not be published. Required fields are marked *