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

 

182,573 thoughts on “Railway Industry in France”

  2. Thank you for some other informative website. The place else may just I get that kind of information written in such a perfect method? I have a venture that I am simply now running on, and I’ve been at the glance out for such info.
    Pig Butchering

  4. Bonus yang ditawarkan oleh Situs Judi Slot Bola Online Terbaik bervariasi, tetapi semuanya dirancang untuk meningkatkan uang Anda.

  6. I genuinely believed you would probably have something useful to say. All I hear is a bunch of whining about something that you can fix if you were not too busy looking for attention. After all, I know it was my choice to read.. 中文補習老師

  7. Hey – decent blog, just looking around plenty of blogs, seems a really nice platform you are using. I’m currently using WordPress for some of my sites but looking to change one amongst these over to a platform similar to yours as a trial run. Anything in particular you’ll recommend about it? ONTARIO FAKE DRIVERS LICENCE

  8. Yoga online Circle, Your personal space Meditation to evolve Life coach, transform and explore. To deepen a regular practice Coaching, we can all use the yoga to heal the body

  12. I love your blog.. very nice colors & theme. Did you create this website yourself or did you hire someone to do it for you? Plz answer back as I’m looking to create my own blog and would like to know where u got this from. thanks IKARIA JUICE

  16. 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.

    https://yogdev.com/

  18. Its alternatively powerful, even though take into account the simple fact after an item reaches that will give full attention to. UK FAKE ID

  19. We are capable to will provide you with the point On this page recognize the simplest way to train the idea the appropriate way. Recognize besides make everything valuable. UK FAKE ID

  20. Idiotic and additionally trusting people at the same time can be an obstacle, on aged and also fully grown folk assembled also will follow a complication. Age and also embryonic concern together. 中文補習

  22. This valuable appearances totally proper. Each one of minimal details have decided thanks to large number with practical experience simple awareness. I’m just excited them just as before significantly. Car Covers

  23. Aw, this was a really nice post. In thought I would like to place in writing in this way moreover – taking time and actual effort to create a very good article… but what / things I say… I procrastinate alot and also no indicates apparently get something done.

    ufabetเว็บตรงแทงบอล

  24. لوله بازکنی تجریش
    لوله بازکنی فوری تجریش
    لوله بازکنی شبانه روزی تجریش
    لوله بازکنی ارزان تجریش

  28. A great lifeguard knows how to grab the reins when needed, leading and helping his or her team through tough situations or everyday work.

  29. A great lifeguard knows how to grab the reins when needed, leading and helping his or her team through tough situations or everyday work.

  34. I really appreciate the kind of topics you post here. Thanks for sharing us a great information that is actually helpful. Good day! voyance

  42. I know your bent on this. I should state we should have an online talk on this. Creating just comments will close the discussion straight away! In addition, will restrict the favorable circumstances from this information. 搬屋公司

  46. Im no expert, but I believe you just made an excellent point. You certainly fully understand what youre speaking about, and I can truly get behind that. voyance

  48. I would like to thank you for the efforts you have made in writing this article. I am hoping the same best work from you in the future as well. In fact your creative writing abilities has inspired me to start my own Blog Engine blog now. Really the blogging is spreading its wings rapidly. Your write up is a fine example of it. AU8娛樂城

  49. I don t have the time at the moment to fully read your site but I have bookmarked it and also add your RSS feeds. I will be back in a day or two. thanks for a great site. gpostingfirm

Leave a Reply

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