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

 

207,160 thoughts on “Railway Industry in France”

  1. I’ve been searching for some decent stuff on the subject and haven’t had any luck up until this point, You just got a new biggest fan!.. plombier

  2. I needed to thank you for this phenomenal read!! I unquestionably adored each and every piece of it. I have you bookmarked your site to look at the new stuff you post. Phy 補習班

  3. I regard this article for the especially researched substance and sublime wording. I got so incorporated into this material that I couldn’t stop examining. I am awed with your work and bent. Thankful to you to such a degree. 佐敦補習

  4. Parafrase online

    Tool parafrase online Indonesia GRATIS untuk membuat artikel yang unik bebas plagiat. Gunakan sekarang untuk skripsi, tugas kuliah, paper dan jurnal.

  7. Such a very useful article. Very interesting to read this article.I would like to thank you for the efforts you had made for writing this awesome article. 物理補習班

  8. After study a few of the blog posts on your website now, and I truly like your way of blogging. I bookmarked it to my bookmark website list and will be checking back soon. Pls check out my web site as well and let me know what you think. IKARIA LEAN BELLY JUICE

  9. 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. I really appreciate this wonderful post that you have provided for us. I assure this would be beneficial for most of the people. 物理補習班

  10. I want you to thank for your time of this wonderful read!!! I definately enjoy every little bit of it and I have you bookmarked to check out new stuff of your blog a must read blog! Top Quality

  12. You have done a great job. I will definitely dig it and personally recommend to my friends. I am confident they will be benefited from this site PBN Homepage

  13. Deneme bonusu, adından da anlaşılacağı gibi, yeni üye olan kullanıcılara ücretsiz olarak sunulan bir bonus türüdür. Bu bonus, kullanıcıların siteyi denemelerini ve bahis yapmaya başlamalarını teşvik etmek amacıyla verilir. Genellikle hesap açma işlemiyle birlikte aktif hale getirilen deneme bonusu, kullanıcılara belli bir miktar para veya bahis kredisi olarak sunulabilir.
    Kaynak : https://hitturkiye.com/

  15. I am extremely delighted in for this web journal. Its a useful subject. It help me all that much to take care of a few issues. Its chance are so awesome and working style so rapid. 物理補習班

  16. First You got a great blog .I will be interested in more similar topics. i see you got really very useful topics, i will be always checking your blog thanks. 物理補習班

  17. Deneme bonusu veren siteler, kullanıcıları çekmek ve onlara platformlarını deneme fırsatı sunmak için bu tür teşvikleri kullanır. Bonuslar genellikle belirli koşullar ve çevrim şartlarıyla birlikte gelir. Örneğin, kullanıcıların belirli bir miktar bahis yapmaları veya belirli bir süre boyunca siteyi kullanmaları gerekebilir. Ancak, deneme bonusları genellikle kullanıcılar için riski minimum düzeyde tutar ve potansiyel kazançlar sağlar.
    Referans : https://hitturkiye.com/

  18. I truly value this superb post that you have accommodated us. I guarantee this would be helpful for a large portion of the general population. 佐敦補習

  19. There are a lot of blogs and articles out there on this topic, but you have acquired another side of the subject. This is reliable content thank you for sharing it. 物理補習班

Leave a Reply

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