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

 

166,285 thoughts on “Railway Industry in France”

  3. Thank you for another great article. Where else could anyone get that kind of information in such a perfect way of writing? I have a presentation next week, and I am on the look for such information. tiffany salon and spa

  4. Anda mendapatkan kesempatan bergabung bersama kami disitus Tangkasnet yang dimana situs ini menyajikan permainan Judi tangkas online terpercaya yang sudah sangat terkenal di asian bahkan di indonesia sendiri. Akan disayangkan apabila kesempatan tersebut anda sia-siakan karena situs kami akan menawarkan beberapa bonus menarik setiap hari nya dan bahkan keuntungan nya pun bisa berlipat lipat ganda. Sudah bertahun-tahun situs kami bergerak di bidang Judi tangkas dan memberikan kesempatan kepada pemula yang menginginkan kesuksesan dengan meraih keuntungan besar disitus kami.

  5. Thanks for the strategies you are discussing on this web site. Another thing I’d like to say is that often getting hold of some copies of your credit score in order to scrutinize accuracy of each detail may be the first activity you have to undertake in credit restoration. You are looking to clean your credit reports from detrimental details flaws that wreck your credit score. best Trident company Singapore

  6. I wanted to thank you for this great read!! I definitely enjoying every little bit of it I have you bookmarked to check out new stuff you post UK FAKE ID

  16. Thanks for the nice blog. It was very useful for me. I’m happy I found this blog. Thank you for sharing with us,I too always learn something new from your post. 토토

  17. Yes, I am entirely agreed with this article, and I just want say that this article is very helpful and enlightening. I also have some precious piece of concerned info !!!!!!Thanks. Updated Ideas

  18. Hey, this day is too much good for me, since this time I am reading this enormous informative article here at my home. Thanks a lot for massive hard work. Updated Ideas

  19. Nice to be visiting your blog again, it has been months for me. Well this article that i’ve been waited for so long. I need this article to complete my assignment in the college, and it has same topic with your article. Thanks, great share. Find Phone Number Owner

  27. You can get a extremely good deal on K2 spice incense via shopping for online. With a couple of dealers at your fingertips, you may take a look at costs constant with gram and maintain coins on shipping. You additionally should purchase K2 incense at wholesale costs, that could be a good deal much less luxurious than purchasing for it from traditional retail stores. liquid K2 for sale

  28. 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. universityx

  29. Your talent is really appreciated!! Thank you. You saved me a lot of frustration. I switched from Joomla to Drupal to the WordPress platform and Ive fully embraced WordPress. Its so much easier and easier to tweak. Anyway, thanks again. Awesome domain! Testsieger

  30. Your talent is really appreciated!! Thank you. You saved me a lot of frustration. I switched from Joomla to Drupal to the WordPress platform and Ive fully embraced WordPress. Its so much easier and easier to tweak. Anyway, thanks again. Awesome domain! Testsieger

  31. Thank you. You saved me a lot of frustration. I switched from Joomla to Drupal to the WordPress platform and Ive fully embraced WordPress. Its so much easier and easier to tweak. Anyway, thanks again. Awesome domain! Testsieger

  32. This article gives the light in which we can observe the reality. This is very nice one and gives indepth information. Thanks for this nice article. Lentor Modern

  34. Nice to be visiting your blog again, it has been months for me. Well this article that i’ve been waited for so long. I need this article to complete my assignment in the college, and it has same topic with your article. Thanks, great share. Lentor Modern price

  41. I really loved reading your blog. It was very well authored and easy to undertand. Unlike additional blogs I have read which are really not tht good. I also found your posts very interesting. In fact after reading, I had to go show it to my friend and he ejoyed it as well! อ่านการ์ตูนฟรี

  46. The Satta king chart is usually a lottery-based game. Still, it’s mostly classified as Satta gambling, and every one Republic of India Satta King is well-known and wide competed within the game around the world, with people going nuts playing it.

  48. 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

  49. This is a smart blog. I mean it. You have so much knowledge about this issue, and so much passion. You also know how to make people rally behind it, obviously from the responses. winner77

Leave a Reply

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