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

 

210,728 thoughts on “Railway Industry in France”

  12. You make so many great points here that I read your article a couple of times. Your views are in accordance with my own for the most part. This is great content for your readers. mashoki

  14. cwin05 là một sòng bạc trực tuyến đa dạng và đầy phong cách, nổi tiếng với việc mang đến trải nghiệm giải trí cá cược đỉnh cao cho người chơi trên khắp thế giới….

  16. Inatogel’s transparent approach to odds and payouts is commendable. Trust and transparency are crucial in the world of online gaming Read more .

  19. That is the excellent mindset, nonetheless is just not help to make every sence whatsoever preaching about that mather. Virtually any method many thanks in addition to i had endeavor to promote your own article in to delicius nevertheless it is apparently a dilemma using your information sites can you please recheck the idea. thanks once more. 146.190.103.93

  25. I’ve noticed the incredible articles and the awesome design of your blog. It’s clear that it’s receiving a lot of positive feedback. maplay789

  26. hello88, nhà cái thịnh hành trong cộng đồng cá cược trực tuyến, mở ra cánh cửa vào thế giới giải trí đầy hứa hẹn. Đăng ký tài khoản ngay hôm nay để nhận ngay 88k miễn phí cho trải nghiệm đầu tiên, cùng với hàng loạt ưu đãi khủng đang chờ đợi.

  29. 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. mashoki

  31. Very efficiently written information. It will be beneficial to anybody who utilizes it, including me. Keep up the good work. For sure i will check out more posts. This site seems to get a good amount of visitors. CANADA VISA

  34. 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. maplay789

  35. bookmarking and checking back frequently!it people processing it really is another person’s renowned company, you will never in the world of the 55 and other lavishness brands supra to uncover which.. maplay789

  38. 99ok là địa chỉ đáng tin cậy cho những người yêu thích cá cược, nơi mang đến cho bạn trải nghiệm đỉnh cao với sự đa dạng và hấp dẫn.

  39. The user interface on Jonitogel is sleek and easy to navigate, making it simple
    for players to purchase tickets and check results See more.

  41. Pretty good post. I have just stumbled upon your blog and enjoyed reading your blog posts very much. I am looking for new posts to get more precious info. Big thanks for the useful info. 카지노 커뮤니티

  43. I simply wanted to thank you a lot more for your amazing website you have developed here. It can be full of useful tips for those who are actually interested in this specific subject, primarily this very post. Your all so sweet in addition to thoughtful of others and reading the blog posts is a great delight in my opinion. And thats a generous present! Dan and I usually have enjoyment making use of your recommendations in what we need to do in the near future. Our checklist is a distance long and tips will certainly be put to excellent use. automatic sample changer

  45. I was dazzled with the site that you made, so memotipasi numerous individuals to be further developed, there likewise kunjugi me, as an examination maplay789

  48. By and by, I have discovered that to remain presumably the most interesting points when it attracts a parallel to. You may discover a few new levels inside L . a . Weight reduction and any one somebody is unfathomably significant. Beginning stage might be genuine liquefying ceaselessly rrn the body. get in shape maplay789

  49. “Great share!”

    Get FoneLab iPhone Data Recovery Software is the best application that allows you to recover lost or deleted data from iPhone. It may be helpful to get back the deleted files from various situations like accidental deletion, device stuck, hardware virus infections, water damage, etc.

    Check for more details at: FoneLab iPhone Data Recovery Software

Leave a Reply

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