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

 

181,572 thoughts on “Railway Industry in France”

  1. Positive site, where did u come up with the information on this posting?I have read a few of the articles on your website now, and I really like your style. Thanks a million and please keep up the effective work. 룰렛게임사이트

  4. Very informative post! There is a lot of information here that can help any business get started with a successful social networking campaign. ufabet888

  6. I was surfing net and fortunately came across this site and found very interesting stuff here. Its really fun to read. I enjoyed a lot. Thanks for sharing this wonderful information. Blue Green Algae

  13. I definitely enjoying every little bit of it. It is a great website and nice share. I want to thank you. Good job! You guys do a great blog, and have some great contents. Keep up the good work. rabar ka ling

  15. Congratulations on having One of the most sophisticated blogs Ive come throughout in a few time! Its just incredible how much you can remove from some thing thanks to how visually beautiful it’s. Youve put collectively an awesome blog space -great graphics, videos, layout. This can be undoubtedly a must-see weblog! cornish rex kittens

  16. I definitely enjoying every little bit of it. It is a great website and nice share. I want to thank you. Good job! You guys do a great blog, and have some great contents. Keep up the good work. ufabet888

  17. Professionals pay attention to the blade and the handle when buying a utility knife. The handle should not be plastic. It breaks quickly and rubs off easily. Especially at the front in the area of the blade, it can be very dangerous if the coating of the blade is rubbed off due to the constant friction on the cutting material and the blade protrudes even when retracted. A metal handle or a multi-component handle is better and safer.

  18. 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. 먹튀검증

  19. Today, I was just browsing along and came upon your blog. Just wanted to say good blog and this article helped me a lot, due to which I have found exactly I was looking. 먹튀검증

  20. Great job here on _______ I read a lot of blog posts, but I never heard a topic like this. I Love this topic you made about the blogger’s bucket list. Very resourceful. 먹튀검증

  21. This is a smart blog. I mean it. You have so much knowledge about this issue, and so much passion. You also know how to make people rally behind it, obviously from the responses. 먹튀검증

  22. I think this is one of the most significant information for me. And i’m glad reading your article. But should remark on some general things, The web site style is perfect, the articles is really great : D. Good job, cheers 먹튀검증

  33. Positive site, where did u come up with the information on this posting? I’m pleased I discovered it though, ill be checking back soon to find out what additional posts you include. uniswap

  34. This is my first time i visit here. I found so many interesting stuff in your blog especially its discussion. From the tons of comments on your articles, I guess I am not the only one having all the enjoyment here keep up the good work uniswap

  36. 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. uniswap

  37. We are truly thankful for your blog entry. You will discover a great deal of methodologies in the wake of going to your post. I was precisely scanning for. A debt of gratitude is in order for such post and please keep it up.  Singapore online casino

  40. ละคร THAIPULSE เว็บไซต์ ดูหนัง หนังใหม่ ดูทีวีย้อนหลัง ละครช่อง3 ดูละครย้อนหลัง อันดับ1 ดูช่อง7 ละครใหม่ ช่องวัน 31 ล.

    ดูหนังฟรี

  45. บาคาร่าออนไลน์ เว็บบาคาร่าที่คนเล่นเยอะที่สุด เซ็กซี่บาคาร่า บาคาร่าSA เว็บบาคาร่าที่เชื่อถือได้ ครบจบทุกความต้องการที่ UFABET.

    แทงบาคาร่า

  46. บาคาร่าออนไลน์ เว็บบาคาร่ายอดฮิต ทางเข้าบาคาร่ามือถือ สมัครเว็บตรงบาคาร่า บาคาร่าสด เว็บบาคาร่า สมัครบาคาร่า.

    สมัครบาคาร่า

  47. คาสิโนออนไลน์ ทางเข้าคาสิโน คาสิโนไม่ผ่านเอเย่นต์ คาสิโนออนไลน์มือถือ เว็บคาสิโนออนไลน์อันดับ1 คาสิโนที่ดีที่สุด คาสิโนเว็บใหญ่.

    คาสิโน

  50. Interesting and amazing how your post is! It Is Useful and helpful for me That I like it very much, and I am looking forward to Hearing from your next.
    kiss anime

Leave a Reply

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