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

 

177,232 thoughts on “Railway Industry in France”

  4. I can see that you are an expert at your field! I am launching a website soon, and your information will be very useful for me.. Thanks for all your help and wishing you all the success in your business.

    먹튀검증

  5. Sandpaper grit is the commonly known product made up with paper backing or cloth material, is mostly required in home improvement.

    카지노

  9. I precisely wished to say thanks again. I do not know the things I would have taken care of without the entire solutions provided by you relating to this situation. It was the distressing circumstance in my view, but viewing your specialised style you dealt with the issue made me to cry with contentment. Now i am happier for the assistance as well as believe you are aware of a powerful job you happen to be getting into training men and women thru a web site. I’m certain you haven’t encountered any of us. BIORESTORE

  10. “Wow, this blog post truly brightened my day! The positive and uplifting tone throughout made me feel so inspired. The author’s words of encouragement and practical tips have motivated me to pursue my goals with renewed enthusiasm. Thank you for spreading positivity and reminding us of the power we hold to create a better world!” Order of Protection New Jersey

  13. Hello, Neat post. There is an issue along with your site in web explorer, could test this¡K IE still is the marketplace leader and a huge portion of other people will miss your magnificent writing because of this problem. ALL DAY SLIMMING TEA

  14. Such an enlightening website. An obligation of appreciation is all together for sharing. Furniture is a thing that we in general need in our home or workplace. In case you thinking about obtaining new goods, by then I propose you buy victorian decorations. Since it’s altogether pleasing and the arrangement is so impeccable. woo feeds

  18. It’s getting warmer. But there is a lot of fine dust. You should pay attention to respiratory care. Wear a mask and drink warm water often. You should pay attention to health care.메이저놀이터

  26. 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. iFit.com Activate Login

  27. Extremely intriguing online journal. A lot of web journals I see nowadays don’t generally give anything that I’m keen on, however I’m most definitely inspired by this one. Recently felt that I would post and let you know.
    Palestine Vs Ukraine

  33. Regular visits listed here are the easiest method to appreciate your energy, which is why why I am going to the website everyday, searching for new, interesting info. Many, thank you 
    Palestine Vs Ukraine

  40. สล็อตออนไลน์ เว็บไซต์ตรงอย่างต่ำ 1 บาท สล็อต ครอบคลุมทุกค่ายกล่าวได้ว่ารวมทุกค่ายไว้ภายในสล็อต เว็บเดียวที่รองรับการเพิ่มได้ทุกแบบอย่าง คำตอบที่ได้เป็นผู้เล่นที่ผู้เล่นอยากได้จริงๆสำหรับทุกคนที่อยากเล่นสล็อต ครอบคลุมทุกค่าย เว็บตรง เว็บของพวกเรายังมีสิทธิพิเศษสำหรับสมาชิกที่ถูกใจเล่น นับได้ว่าเป็นสิ่งที่ดีศูนย์รวมสล็อตของทุกค่ายไว้ภายในเว็บไซต์เดียว ฝาก ถอน ไม่มีอย่างต่ำ

    สล็อตออนไลน์

  41. Sports glasses or sports glasses? The difference is subtle and not only from a lexical point of view, often similar but not entirely the same, the two types of frames certainly fall into the same family, often designed for men or mostly unisex occhiali oakley ballistic

Leave a Reply

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