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

 

181,257 thoughts on “Railway Industry in France”

  1. An additional issue is that video games can be serious naturally with the key focus on learning rather than entertainment. Although, there is an entertainment element to keep your kids engaged, every game is often designed to focus on a specific experience or program, such as mathematics or technology. Thanks for your post. 스포츠토토

  3. Welcome To MyToolsTown Instagram Auto Liker, Auto Comments & Auto Followers. A Website Made for those people who want to gain fame on instagram by getting a lot of likes, followers & comments. How Do We Make “FREE” Possible? Same as you, lots of real & active instagram users gather here to like and follow each other. Everyone earn credits by Liking & Following others. You also earn this credits and You can use them to get Likes & Followers on your Instagram account & posts. We have created the Best Instagram auto liker website which you can use to get unlimited auto likes, auto followers and awesome auto comments on your instagram for totally free. auto liker instagram

  5. You actually dealt with several engaging things in this article. I came across it by using Bing and I’ve got to admit that I am now subscribed to your website, it is very decentSeriale Turcesti

  9. great inspiring article. You have a good site. It is really easy, and nice to navigate.I think the website is great, looks wonderful and very easy to follow . This Is Very Nice and Wonderful Keep Writing Such type Of Wonderful blogs it was a wonderful chance to visit this kind of site and I am happy to know. thank you so much for giving us a chance to have this opportunity.. Extremely intriguing exchange happy that I ran over such useful post. Keep doing awesome. Happy to be a piece of your net group 토토

  13. With so many books and articles seeming to provide a gateway into the make-money-online area, readers are further confused about the actual process of earning money. thecadaily news check here for more information.

  14. This is an excellent post with a wealth of information. Keep posting more of these types of posts to keep readers engaged in your website. click here for latest news demon slayerm.

  15. The first phase the preparation should, theoretically, be uninfluenced by the intended intensity and duration of the sound which is subsequently produced. In fact, however, so quickly are the three phases accomplished that the pianist rarely has capacity to think, in performance, of each phase separately. newport residences

  21. Excellent work. You’ve made some extremely fascinating points, in my opinion. Continue your excellent work. techvtimes click here for more information .

  22. I’m delighted I came across your blog! Students may want to consider the secrets to creating effective literary essays on occasion.

  24. Thank you for providing this informative information. It is being used to show a college project. It is quite beneficial to me. the wadaily click here for more news.

  25. I’d like to thank you for putting in the time and effort to construct this website. I look forward to reading more of your high-quality weblog posts in the future. the wadaily check here for news.

  31. It’s my first time visiting this location. Your blog contains a wealth of intriguing stuff, particularly the debates. According to the countless comments left on your publications, oursmartlife news
    check here for more news.

  36. This is an excellent post with a wealth of information. Keep posting more of these types of posts to keep readers engaged in your website. elenatech news click here for more news update.

  43. Truly, this article is really one of the very best in the history of articles. I am a antique ’Article’ collector and I sometimes read some new articles if I find them interesting. And I found this one pretty fascinating and it should go into my collection. Very good work! slot pulsa

  47. This is such a great resource that you are providing and you give it away for free. I love seeing blog that understand the value. Im glad to have found this post as its such an interesting one! I am always on the lookout for quality posts and articles so i suppose im lucky to have found this! I hope you will be adding more in the future… International drivers permit

  49. Vipleague is a free streaming service that offers live coverage of over 20 sports. The company earns money by displaying ads. The service is completely free to watch and you can watch it as many times as you want without any risk. vipleague

  50. Thanks for an interesting blog. What else may I get that sort of info written in such a perfect approach? I have an undertaking that I am just now operating on, and I have been on the lookout for such info. You completed a few fine points there. I did a search on the subject and found nearly all persons will go along with with your blog. This is an awesome motivating article.I am practically satisfied with your great work.You put truly extremely supportive data. Keep it up. Continue blogging. Hoping to perusing your next post 먹튀

Leave a Reply

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