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

 

164,939 thoughts on “Railway Industry in France”

  5. Pretty good post. I just stumbled upon your blog and wanted to say that I have really enjoyed reading your blog posts. Any way I’ll be subscribing to your feed and I hope you post again soon. Big thanks for the useful info. Pune Call Girls

  8. Someone Sometimes with visits your blog regularly and recommended it in my experience to read as well. The way of writing is excellent and also the content is top-notch. Thanks for that insight you provide the readers! ciekawe restauracje warszawa

  18. Microsoft 365 is much more than an email program or a word processor, If you have the right subscription plan for you. Increasing workplace productivity, whether in a profession or a business Increasing company efficiency has become a must for professionals and companies, and Microsoft 365 makes it easy.
    microsoft365.com/setup

  23. Congratulations on having One of the most sophisticated blogs Ive come throughout in a few time! Its just incredible what you can remove from a thing thanks to how visually beautiful it’s. Youve put collectively a terrific blog space -great graphics, videos, layout. This is certainly undoubtedly a must-see weblog! เทคนิคแทงไฮโล

  24. Can I just say what a aid to seek out somebody who actually knows what theyre speaking about on the internet. You definitely know how one can bring a problem to light and make it important. More individuals have to read this and understand this side of the story. I cant consider youre no more well-liked since you positively have the gift. เดิมพันไฮโลออนไลน์

  31. Just desire to say your article is as amazing. The clearness in your post is just great and i can assume you’re an expert on this subject. Fine with your permission let me to grab your RSS feed to keep updated with forthcoming post. Thanks a million and please keep up the gratifying work. CTFO

  32. I visit your blog regularly and recommend it to all of those who wanted to enhance their knowledge with ease. The style of writing is excellent and also the content is top-notch. Thanks for that shrewdness you provide the readers! ufabet

  34. I am impressed. I don’t think Ive met anyone who knows as much about this subject as you do. You are truly well informed and very intelligent. You wrote something that people could understand and made the subject intriguing for everyone. Really, great blog you have got here. casinos online

  35. This particular is usually apparently essential and moreover outstanding truth along with for sure fair-minded and moreover admittedly useful My business is looking to find in advance designed for this specific useful stuffs… casinos online

  39. I think this is an informative post and it is very useful and knowledgeable. therefore, I would like to thank you for the efforts you have made in writing this article. good article here

  40. Remarkable article, it is particularly useful! I quietly began in this, and I’m becoming more acquainted with it better! Delights, keep doing more and extra impressive! casino portugal

  45. สล็อต Slotxo โบนัสทุกยอดฝาก ฝาก-ถอน อัตโนมัติ รวดเร็ว สล็อตออนไลน์ Slotxo แจกเครดิตฟรี ดาวน์โหลดสล็อตทางเข้าสล็อต สมัครสมาชิกใหม่ โบนัส 100% Slotxo

  48. This is a good post. This post gives truly quality information. I’m definitely going to look into it. Really very useful tips are provided here. Thank you so much. Keep up the good works. casinos online

  49. Thanks so much for this information. I have to let you know I concur on several of the points you make here and others may require some further review, but I can see your viewpoint. casinos online

Leave a Reply

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