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

 

164,964 thoughts on “Railway Industry in France”

  9. I am sure this piece of writing has touched all the internet users, its really really fastidious piece
    of writing on building up new weblog.
    토토

  10. Hi there!You have made some decent points there. I just want to offer you a big thumbs up for the great info you have right here on this post. I am returning to your website for more soon. 파워볼

  15. 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.
    Broker Advisor

  16. I think this is an informative post and it is very beneficial and knowledgeable. Therefore, I would like to thank you for the endeavors that you have made in writing this article. All the content is absolutely well-researched. Thanks… Hard Money Lenders in Arizona

  17. Although developments in educational technology is of recent phenomenon, still plenty of research studies carried out separately in the field of technology buy traffic

  24. That’s a great article! The neatly organized content is good to see. Can I quote a blog and write it on my blog? My blog has a variety of communities including these articles. Would you like to visit me later? 토토사이트추천

  30. “This is especially true when the Covid-19 cases are on the rise daily,” Boo said, adding that the decision to enter into this business is also part of the Group`s ambition to contribute to the society.메이저사이트

  31. All the contents you mentioned in post is too good and can be very useful. I will keep it in mind, thanks for sharing the information keep updating, looking forward for more posts.Thanks 먹튀검증

  32. What a fantabulous post this has been. Never seen this kind of useful post. I am grateful to you and expect more number of posts like these. Thank you very much.wm casino

  33. Kamal Associates Offers 3BHK 100 Gaj Flat with Lift and Car Parking in Matiala Uttam Nagar 300 Meter Away From Metro Station.

    For More Details :-https://www.youtube.com/watch?v=pWJmEpPjs_Y

  35. I’m writing on this topic these days, keonhacai, but I have stopped writing because there is no reference material. Then I accidentally found your article. I can refer to a variety of materials, so I think the work I was preparing will work! Thank you for your efforts.

  37. I like what you’ve written here,and I’ll share this with my friends now.
    They are currently working on the dark web links,
    but I am sure that once I share this article with them,they’ll leave this immediately.

    ผมยาว

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

    Corel Draw x7 Crackeado

  44. Thanks for taking the time to discuss that, I feel strongly about this and so really like getting to know more on this kind of field. Do you mind updating your blog post with additional insight? It should be really useful for all of us. dmt cart

  45. I really thank you for the valuable info on this great subject and look forward to more great posts. Thanks a lot for enjoying this beauty article with me. I am appreciating it very much! Looking forward to another great article. Good luck to the author! All the best! dmt cart

  47. Great info! I recently came across your blog and have been reading along. I thought I would leave my first comment. I don’t know what to say except that I have. psychology

  48. Thanks for taking the time to discuss this, I feel strongly about it and love learning more on this topic. If possible, as you gain expertise, would you mind updating your blog with more information? It is extremely helpful for me. visit this portal

Leave a Reply

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