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

 

222,866 thoughts on “Railway Industry in France”

  6. That’s in addition a great publish which i really valued learning. It’s not every day that people maintain the opportunity to discover something. 書法班

  7. 안녕하세요. GOOGLE을 사용하여 블로그를 찾았습니다. 이것은 아주 잘 쓰여진 기사입니다. 나는 그것을 북마크하고 당신의 유용한 정보를 더 읽기 위해 돌아올 것입니다. 게시물 주셔서 감사합니다. 꼭 돌아 올게요. 유럽축구중계

  9. 이러한 유형의 콘텐츠를 더 많은 저자가 연구하고 글을 잘 쓰는 데 시간이 걸리 길 바랍니다. 저는 당신의 비전과 통찰력에 깊은 인상을 받았습니다. NBA중계

  10. Overland Chauffeured Services
    Kansas City’s Premier Chauffeured Transportation & Limousine Rental Service. We specialize in KC car services, corporate transportation, group shuttles, airport transportation, limo rental, charter bus services and more! 
    2017 W 104th St, Leawood, KS 66206

  16. The when I read a blog, Hopefully which it doesnt disappoint me approximately that one. What i’m saying is, It was my choice to read, but I just thought youd have something intriguing to convey. All I hear is actually a few whining about something that you could fix should you werent too busy looking for attention. motorized projection screen

  22. That is the nice tips and hints certainly towards some of those having their first go blogosphere, temporary not to mention adequate information… Thanks a lot for the purpose of showing gas 4 free :. Vital read through piece of writing. Sus 2 Beats

  24. Great post, I think website owners should acquire a lot from this web site its very user pleasant.

  25. 안녕하세요 처음으로 귀하의 웹 사이트를 방문했습니다. 나는 당신의 게시물에서 좋은 정보를 얻었습니다. 나는 당신의 웹 사이트에서 일의 질을 얻었습니다. 이제 나는 당신의 영구 사용자입니다. 스포츠중계

  26. You can certainly see your expertise within the work you write. The sector hopes for even more passionate writers such as you who aren’t afraid to mention how they believe. At all times go after your heart. a course in miracles

  27. Good day! This post couldn’t be written any better! Reading this post reminds me of my good old room mate! He always kept talking about this. I will forward this page to him. Pretty sure he will have a good read. Thank you for sharing! WordPress Migration

  29. Thanks for a wonderful share. Your article has proved your hard work and experience you have got in this field. Brilliant .i love it reading. acim

  30. very interesting post.this is my first time visit here.i found so mmany interesting stuff in your blog especially its discussion..thanks for the post! acim

  31. 솔직히 말해서 스타일로 글을 쓰고 좋은 칭찬을받는 것은 꽤 어렵지만, 너무 차분하고 시원한 느낌으로 해냈고 당신은 일을 잘했습니다. 이 기사는 스타일이 돋보이며 좋은 칭찬을하고 있습니다. 베스트! 소액결제현금화

  32. I am happy to find this post very useful for me, as it contains lot of information. I always prefer to read the quality content and this thing I found in you post. Thanks for sharing. acim

  33. It was a very good post indeed. I thoroughly enjoyed reading it in my lunch time. Will surely come and visit this blog more often. Thanks for sharing. acim

  37. Simply wish to say your article is as surprising. The clarity in your post is simply cool and i could assume you are an expert on this subject. Well with your permission allow me to grab your feed to keep up to date with forthcoming post. Thanks a million and please continue the enjoyable work. coffee grinders

  44. This is my first time i visit here. I found so many interesting stuff in your blog especially its discussion. From the tons of comments on your articles, I guess I am not the only one having all the enjoyment here! keep up the good work Abrillantado de coches Vigo

  46. SSN validation refers to verifying that a social security number is authentic and belongs to a real person. There are free online services that allow you to enter an SSN and check that is legitimate.

    freessnvalidator

Comments are closed.