by

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

 

165,231 thoughts on “Railway Industry in France”

  5. Its such as you read my mind! You appear to grasp so much about this, such as you wrote the guide in it or something. I feel that you could do with a few percent to force the message house a little bit, but instead of that, this is magnificent blog. A fantastic read. I will certainly be back. 토토사이트

  9. Hi there, just became alert to your blog through Google, and found that it’s really informative. I am going to watch out for brussels. I’ll be grateful if you continue this in future. Lots of people will be benefited from your writing. Cheers! 안전놀이터

  15. That’s not me not used to blogging and actually value internet site. You can find much innovative content that peaks my interest. Let me bookmark your website whilst checking you out of trouble. pagalworld 2023

  23. Wow, cool post. I’d like to write like this too taking time and real hard work to make a great article but I put things off too much and never seem to get started. Thanks though.mobile

  25. Platforma Talkingabout.ro isi doreste sa deserveasca rolul de publicatie online prin care oameni, adulti si copii pot invata despre educatie financiara, dezvoltare personala, sanitate si multe altele. Acesta se bazeaza pe indentificarea problemelor cu care se confrunta populatia si raspunderea la intrebari complexe din domeniul finantelor, dezvoltarii personale si a sanatatii in mod transparent si pe intelesul tuturor.

    Platforma Talkingabout.ro urmareste sa creasca nivelul de cunostinte si abilitati in domeniile dezvoltarii personale si a finantelor a cititorilor pentru ai ajuta sa se dezvolte si totodata sa dezvolte societatea in care traim. Ajutam cititorii sa isi gestioneze riscurile associate serviciilor financiare si sa prezinte beneficiile de care pot avea parte, planificarea unui buget si organizarea veniturilor, metode cum sa faci bani, etc.

    Valorile Talkingabout foarte importante pentru noi si incercam sa le respectam in tot cee ace facem: dezvoltare sustenabila si continua, onestitate si transparenta.

    Educatie financiara

  28. If you have any questions about the safe eat-and-run guarantee company provided by Eat Tiger, please contact the customer center at any time! 먹튀 검증

    We will recommend and introduce each Toto site that suits the characteristics of each company and members. Make high profits through our eating tiger.

  29. 먹튀 검증 먹튀타이거에서 제공하는 안전한 먹튀 보증 업체에 대한 문의는 언제든지 고객센터로 연락 주세요! 업체별 특징과 회원님들에게 맞는 토토사이트 하나하나 추천해 드리고 소개하겠습니다. 저희 먹튀타이거를 통해서 고수익 만드세요!

  31. Hello, i just planned to drop that you a line to say that we thoroughly enjoyed this particular post from yours, I have subscribed for your RSS feed and have absolutely skimmed several of your articles or blog posts before but this blog really endured out in my situation. Costcofoodcourt

  33. ağır ceza avukatı, en iyi
    Ağır Ceza avukatı fiyatları
    Asliye ceza avukatı
    Ağır ceza avukatı maaş
    Ağır ceza avukatı Nedir
    Ağır ceza avukatı Ne iş Yapar
    Uzman ceza avukatı
    Ağır ceza avukatı Nasıl Olunur. Ağır ceza avukatı

  34. Pretty good post. I just stumbled upon your blog and wanted to say that I have really enjoyed reading your blog posts. Any way I’ll be subscribing to your feed and I hope you post again soon. Big thanks for the useful info. สล็อตฟรี

  37. I came to this site with the introduction of a friend around me and I was very impressed when I found your writing. I’ll come back often after bookmarking! safetoto .

  38. From some point on, I am preparing to build my site while browsing various sites., It is now somewhat completed. If you are interested, please come to play with slotsite !!

  39. Your post is very helpful to get some effective tips to reduce weight properly. You have shared various nice photos of the same. I would like to thank you for sharing these tips. Surely I will try this at home. Keep updating more simple tips like this. women clothes

  40. It’s too bad tcheck your article late. I wonder what it would be if we met a little faster. I want to exchange a little more, but please visit my site casinocommunity and leave a message!!

  47. Very interesting blog. A lot of blogs I see these days don’t really provide anything that I’m interested in, but I’m most definitely interested in this one. Just thought that I would post and let you know 먹튀검증

Leave a Reply

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