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

 

165,462 thoughts on “Railway Industry in France”

  3. A good Collection of information in Your article got some useful informaton, I hope you in future you will provide us such interesting articles. I really like your website and articles in your blog Thanks for sharing
    Ghum Hai Kisi Ke Pyar Mein

  4. Thanks for a very interesting blog. What else may I get that kind of info written in such a perfect approach? I’ve a undertaking that I am simply now operating on, and I have been at the look out for such info. على البارد

  11. This is my first time visit to your blog and I am very interested in the articles that you serve. Provide enough knowledge for me. Thank you for sharing useful and don’t forget, keep sharing useful info: สล็อต

  14. Can I say what relief to uncover someone who in fact knows what theyre referring to on the net. You definitely learn how to bring a worry to light and make it important. More people have to look at this and understand this side of your story. I cant believe youre no more common because you undoubtedly have the gift. knee sleeves

  15. Incredible posting this is from you. I am really and truly thrilled to read this marvelous post. You’ve really impressed me today. I hope you’ll continue to do so! 網站設計

  26. This article gives the light in which we can observe the reality. This is very nice one and gives indepth information. Thanks for this nice article. soaptoday

  27. I think this is an informative post and it is very beneficial and knowledgeable. Therefore, I would like to thank you for the endeavors that you have made in writing this article. All the content is absolutely well-researched. Thanks… 토토사이트

  32. Superior post, keep up with this exceptional work. It’s nice to know that this topic is being also covered on this web site so cheers for taking the time to discuss this! Thanks again and again! garuda138

  35. I haven’t any word to appreciate this post…..Really i am impressed from this post….the person who create this post it was a great human..thanks for shared this with us. สล็อต

  38. The JSON format is syntactically identical to the code for creating JavaScript objects. Because of this similarity, a JavaScript program can easily convert JSON data into native JavaScript objects. The JSON syntax is derived from JavaScript object notation syntax, but the JSON format is text only.

    The free JSON Beautifier tool used as JSON editor, Json viewer, Json Validator, JSON Viewer Online, valid json and Json formatter to parse json in a tree view and plain text, have jsonlink jsonpretty functions.

  41. I haven’t any word to appreciate this post…..Really i am impressed from this post….the person who create this post it was a great human..thanks for shared this with us. free credit

  44. Cumpara telefon HUAWEI nova 10 Pro din HUAWEI Store Romania cu livrare gratuita si rapida 8GB 256GB, camera frontala 60MP, design ultra subtire, SuperCharge 100W Plata in rate fara dobanda sau plata ramburs fara taxe
    nova 10 Pro

  45. I’m dazzled, I should state. In all respects infrequently do I run over a blog that is both useful and engaging, and let me let you know, you ve hit the nail on the head. Your blog is significant.. content creation service

  48. Cumpara telefon HUAWEI nova 10 Pro din HUAWEI Store Romania cu livrare gratuita si rapida 8GB 256GB, camera frontala 60MP, design ultra subtire, SuperCharge 100W Plata in rate fara dobanda sau plata ramburs fara taxerdytfuigojbknjbv
    nova 10 Pro

  50. I just couldn’t leave your website before telling you that I truly enjoyed the top quality info you present to your visitors? Will be back again frequently to check up on new posts. satta king 786

Leave a Reply

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