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

 

165,332 thoughts on “Railway Industry in France”

  3. There couple of fascinating points at some point in this posting but I don’t determine if these people center to heart. There is some validity but Let me take hold opinion until I check into it further. Great write-up , thanks and then we want more! Combined with FeedBurner in addition My Blog Site

  20. The Brad Hendricks Law Firm has the TRADITION of working hard to resolve the legal problems faced by individuals and businesses throughout the state of Arkansas. We also have the REPUTATION of devoting the time and attention your case deserves in order to win your case. We draw upon over 275 years of combined experience and RESULTS-driven success to represent you in a range of legal needs. It is our service that has made The Brad Hendricks Law Firm one of the most successful law firms in the state for over twenty-five years. Personal Injury Lawyer

  21. prettybacarat We are another website that offers baccarat services, providing every game from leading camps as a collection source. Plenty of games and jackpot bonuses Fast and there are many new games for you to choose to play uniquely as a direct website that does not pass through agents, works easily, guarantees all systems of use

  22. We’re always looking for that perfect content to share with your audience. Whether you have a blog, articles, or any other platform, we can help you gain more subscribers, grow your audience and increase your revenue.

  25. Quytech has been developing successful mobile Apps for more than 10+ years. Hire Indian App Developers to turn your idea into a profitable mobile app. Our 200+ experts team is renowned among clients across the globe for their tech expertise and professionalism to transform any complex need into compelling Apps. Our best and most dedicated developers are certified in many programming languages such as React Native, Flutter, iOS, Android, Kotlin, etc., to build feature-rich and functional mobile applications. Our flexible engagement models help you to hire remote mobile App developers and work dedicatedly on your project.

  30. This is really a nice and informative, containing all information and also has a great impact on the new technology. Check it out here: ranksway

  32. Century 10 by 2 Millennium – Is A Finest and Comfortable Residence Place In Bangalore
    It is the ideal residence because it provides a unique blend of modern facilities like 24-hour security, power backup, Wi-Fi connectivity gardens, parks, and playgrounds, etc. Real estate is dedicated to offering clients top-notch service, creative designs, and superior structure.
    Visit: https://century10by2millennium.co.in/

  34. ชาวนักปั่นสล็อต https://5m.live/slots-king99/ ที่ไม่กลัวการเล่นเกม ไม่กังวลในการเล่นเกมส์ ไม่ต้องหรอว่า ตลาดโลกในแต่ละวันเป็นยังไง ก็สามารถเข้า ร่วมปั่นสล็อตได้ เพราะการปั่นไม่ต้องอาศัยภาพรวม ข่าว หรือธุรกิจสื่อต่างๆ แต่อาศัย เขนดาบในการเล่น เกมโดยการฝึกฝน ความชำนาญในการเล่นเกมส์ หรืออัตราการจ่าย เงินซึ่งเป็นระบบ เครดิตฟรี ที่ทุกคนสามารถ เข้าถึงเข้าเล่นได้โดยที่เงินลงทุนเริ่มต้นอยู่ที่1บาท ก็สามารถเล่นเกมได้ และ ทำเงิน กำไรไปกับเกมที่ท่านคาดไม่ถึง

Leave a Reply

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