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

 

182,600 thoughts on “Railway Industry in France”

  1. Whoi, excellent, t wondered just how to cure icne. ind found your webstte by google, dtscovered todiy t’m i ltttle obvtous i greit deil. t’ve ilso idded RSS ind sive your webstte. keep us updited. 英國地產

  6. I am always searching online for articles that can help me. There is obviously a lot to know about this. I think you made some good points in Features also. Keep working, great job! 倫敦樓盤

  7. I have added and shared your site to my social media accounts to send people back to your site because I am sure they will find it extremely helpful too. 英國地產

  9. I without a doubt inspired after read this because of some great work and informative mind . I simply wanna say thank you for the author and wish you all of the high-quality for coming!. fast lean pro reviews

  12. I have bookmarked your website because this site contains valuable information in it. I am really happy with articles quality and presentation. Thanks a lot for keeping great stuff. I am very much thankful for this site.sharing app

  17. Incredible post yet I was pondering whether you could create a litte more regarding this matter? I”d be outstandingly appreciative if you could elucidate a slight bit further. Worth it! 英國買樓

  21. I really awed after read this in light of some quality work and instructive thoughts . I just wanna offer significant thanks for the writer and need you to appreciate all that life brings to the table for coming!. 英國樓盤

  22. Very interesting article, I really like this article that you have created. If you want to try playing online games with real cash prizes, you can visit OMBAK88 site.

  23. Very interesting article, I really like this article that you have created. If you want to try playing online games with real cash prizes, you can visit OMBAK88 site.

  24. The best means get some type of digital book and appreciate this nearly from anyplace is during the whole entrancing procedure including mp 3 mp3 book recordings. The genuine sound digital book outlets that constantly one considers as quickly as. 英國物業

  32. it turned into a top notch danger to visit this type of website and i’m satisfied to understand. thanks so much for giving us a chance to have this opportunity.. kerassentials

  33. This is my first time visit to your blog and I am very interested in the articles that you serve. Provide enough knowledge for me. Thank you for sharing useful and don’t forget, keep sharing useful info: 英國買樓

  35. Really a great addition. I have read this marvelous post. I really like that. Thanks for sharing information about it.

  38. You will discover on our sites special no deposit bonuses,no deposit casino , no deposit poker , no deposit bingo , no deposit foreign exchange and all of the simplest deposit bonuses tooth cartoon

  39. The next time I study a weblog, I hope that it doesnt disappoint me as a whole lot as this one. I mean, I comprehend it was my option to analyze, however I genuinely concept youd have something captivating to say. All I listen is a group of whining about something that you might restore if you werent too busy searching for interest. cosmetic dental houston

  40. Greetings! This is my first go to for your blog! We are a group of volunteers and starting a brand new initiative in a network in the identical niche. Your blog supplied us useful statistics to paintings on. You have achieved a terrific activity! dentist office

  41. remarkable post, very informative. I ponder why the opposite specialists of this area don’t realise this. You must preserve your writing. I’m confident, you’ve got a extraordinary readers’ base already! dentist baltimore

  43. Your ideas for home decor are fantastic! I’m always looking for ways to spruce up my space, and your tips are both creative and budget-friendly. Can’t wait to try some of them out. Thanks for the inspiration! TATA Bus

  44. An charming discussion can be really worth comment. I suppose which you must write concerning this subject matter, it’ll no longer often be a taboo concern however commonly men and women are insufficient to talk on such subjects. To another. Cheers parker dental

  45. Thank you for the sensible critique. Me & my neighbor were simply getting ready to do a little studies about this. We were given a seize a ebook from our area library however I suppose I learned more from this post. I am very satisfied to peer such extraordinary records being shared freely accessible. cosmetic dentist in Ladera Ranch

Leave a Reply

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