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

 

206,790 thoughts on “Railway Industry in France”

  1. Extremely helpful post. This is my first time i visit here. I discovered such a large number of intriguing stuff in your blog particularly its exchange. Truly its extraordinary article. Keep it up. gippro

  3. Intimately, the post is really the greatest on that worthw hile topic. I match in with your conclusions and also will eagerly look forward to your next updates. Simply saying thanks will certainly not simply be enough, for the wonderful clarity in your writing. I can without delay grab your rss feed to stay abreast of any updates. Pleasant work and also much success in your business endeavors! scrap car wreckers auckland

  4. I haven’t checked in right here for a while due to the fact I idea it changed into getting dull, however the previous couple of posts are truely true satisfactory so I bet I’ll add you returned to my each day bloglist. You deserve it my pal. Insurance publications 토토사이트

  5. 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. ballzaahd.com

  6. I have added and shared your site to my internet based life records to send individuals back to your webpage since I am certain they will discover it incredibly supportive as well. 中學中文

  9. I like the valuable information you provide in your articles. I’ll bookmark your weblog and check again here frequently. I’m quite certain I’ll learn plenty of new stuff right here! Best of luck for the next! TUPI TEA

  14. I was surfing the Internet for information and came across your blog. I am impressed by the information you have on this blog. It shows how well you understand this subject. ballzaahd.com

  27. This is exactly what I was looking for. Thanks for sharing this great article! That is very interesting Smile I love reading and I am always searching for informative information like this! 中學中文

  31. You have a certifiable limit with regards to making one out of a sort substance. I like how you think and the manner in which you address your points of view in this article. I agree with your mentality. Thankful to you for sharing. 中文補習邊個好

  33. This is only the data I am discovering all over the place. A debt of gratitude is in order for your website, I simply subscribe your online journal. This is a decent blog.. 中學中文

  34. PTLIGA SITUS TARUHAN BOLA TERPERCAYA,DAFTAR SEKARANG JUGA DAN DI PTLIGA TERDAPAT BANYAK PERMAINAN TIDAK HANYA PASANG BOLA SAJA..

  38. Thanks for such a fantastic blog. Where else could anyone get that kind of info written in such a perfect way? I have a presentation that I am presently writhing on, and I have been on the lookout for such great information.mindfulness

  39. Good write-up, I¡¦m normal visitor of one¡¦s blog, maintain the nice operate, and It is going to be a regular visitor for a long time.plant-based

  41. Wgrane.pl – Najlepszy humor i rozrywka w internecie. Smieszne filmy, gry, mp3, teledyski, reklamowki, filmiki, video, film, free itp. wgrane.pl

  46. Love readings are dedicated to matters of the heart, providing guidance and understanding in romantic relationships. Whether you’re seeking clarity about a current partnership or searching for soulmate connections, love readings delve into the intricacies of love, uncovering patterns, potentials, and obstacles.
    Reference : https://www.etsy.com/shop/psychicdharmatarot

  50. situs judi bola terpecaya PTLIGA menang pasti bayar , minimal deposit cuman 25 ribu bisa menggunakan ovo , dana gopay dan link aja . selain itu terdapat juga permainnan slot togel casino poker sabung ayam dan masih banya yang lain nya

Leave a Reply

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