In France, a Truly Low-Cost High-Speed Rail Option

Ouigo

» To convince even more passengers to take the train, the SNCF national rail carrier plans to offer very cheap tickets.

France’s SNCF national rail service has, since the introduction of the TGV in 1981, held to the belief that fast trains should not be segregated to serve only higher-paying passengers. As a result, fast trains have replaced all slow-speed service on most long-distance travel throughout the country; passengers are able to take advantage of fare deals that allow them to journey between cities hundreds of miles apart at €25 or less, as long as they book in advance.

This dedication to opening up speedy trains to people across the income spectrum is unique compared to most other European and Asian countries. In Germany, for instance, train service between major cities is often available at two speeds — fast Intercity-express and slower InterCity, at very different prices. In the U.S., too, a trip on Amtrak’s Acela “high-speed” service in the Northeast is routinely $50 or more than a similar journey on the slightly slower Regional.

SNCF has now extended the principle further with the introduction of its OuiGo* service this week. Attempting to spur more train ridership, particularly among car owners living in the eastern suburbs of Paris, OuiGo will offer 300 km/h TGV speed at very low prices, starting at €10 for journeys between the Paris region and the Mediterranean coast (Montpellier and Marseille, via Lyon), a trip of about 500 miles (10% of overall tickets will be as low as that, with the rest increasing to a maximum of €85). SNCF claims that these ticket prices are the lowest available in the world for high-speed trains. Current TGV tickets start at €19 for similar journeys, but generally are above €50. OuiGo tickets will always be cheaper than equivalent TGV tickets on similar journeys.

OuiGo brings the aviation low-cost concept to high-speed railways. In exchange for a cheap ticket, customers will be charged for a second carry-on bag; they’ll pay more for the use of an electrical outlet; they’ll be unable to change their tickets without a fee. There will be fewer conductors — only four per train, who will also be tasked with some maintenance. Double-decker trains will seat 1,268 passengers, not because seats have been compressed (unlike the airlines, thank god), but rather because the first class and dining car spaces have been replaced by economy-class areas. Trains themselves will be scheduled to run more often than typical TGVs, traveling about 80,000 kilometers per month, double the normal rate.

OuiGo is SNCF’s second lower-fare offering; the first, idTGV, was introduced in 2004 and has regular TGV amenities though trains generally travel at less convenient times and certain extras, like video games, are sometimes offered. The agency, though, has been planning a more full-scale incursion into the low-cost market since 2009 and OuiGo is its offering. There are currently no rail competitors to SNCF in the domestic market,** and it holds something close to a monopoly on the air-rail market on the city pairs it is planning to serve with OuiGo, but there remain a substantial number of people who make the trip by car, and that is the group SNCF hopes to target here.

Like Ryanair, Europe’s foremost low-cost airline, OuiGo will not serve the more convenient passenger terminals where most TGVs board and alight. Rather, the Paris region stop will be located 20 km east of the city in Marne La Vallée (the location of Disneyland Paris); Lyon’s, instead of being in the center of the city, will be out at the St. Exupéry airport. One major reason for this service pattern is that the public agency that owns the tracks (RFF) charges SNCF (also a public agency) more for the use of tracks and stations in center city areas than those in the suburbs. Labor represents for only about 20% of TGV operations costs, while track fees, which are becoming increasingly onerous (they will be augmented by €200 million in 2013 alone) and which pay for maintenance and upgrades, account for a large potion of expenditures.

It’s an innovative approach to providing train service at lower costs, one that sacrifices convenience to the city center for easy access for suburban automobile users, who, despite France’s rather well-developed transit networks, nonetheless constitute a large portion of the population. For them, an easy-to-access train station in the suburbs — combined with cheaper-than-normal tickets — may be enough to induce them to switch to the train.

But the service remains an experiment, with only a few destinations announced thus far and only four trains dedicated to the service, painted in bright light blue paint and outfitted with rose-colored seats. It will be interesting to see whether this fare and service model is appreciated by customers, or whether they will instead continue to either shell out a little more for seats on standard TGVs or drive long distances in their private cars.

Unions have denounced OuiGo as “third class” service, and while I wouldn’t go that far, it is certainly true that compared to the historic TGV approach, this low-cost model is a downgrade. Nonetheless, OuiGo will make it possible for a large group of the population that had previously avoided the train to hop on board at speeds just as fast as those offered by normal TGVs; shouldn’t that be considered a good thing?

The question is, if OuiGo is successful in attracting a customer base, will SNCF increase its segmentation of services by price range? Will service on regular TGVs increase in cost and become more luxurious, as the less wealthy segments of the population are subjected to something approaching the cattle car?

Update, 27 February: G. Hughes describes on his blog (in French) price differentials in track charges between the OuiGo service and a regular TGV on trips between the Paris region and Lyon. In 2014, SNCF will be charged about €10,900 per TGV train trip but €7,400 per OuiGo train trip because of OuiGo’s use of less-used stations and less-used track. These savings can then translate into cheaper fares.

* “OuiGo” is a franglais expression, combining the French “oui” (yes) with the English “go.” The name is intended to be read “we go,” fully in English. I won’t comment on the state of contemporary French marketing.

** The French rail market will be opened up to some competition from other rail providers later in the decade, and this is surely one explanation for the agency’s decision to move into low-cost services now. SNCF and several other companies do offer intercity bus connections between some French cities, though those trips are much slower and, if booked in advance, more expensive than TGV trips, so they account for a far small market share.

43 Comments | Leave a Reply »
  • “There will be fewer conductors — only four per train, who will also be tasked with some maintenance.”

    “Unions have denounced OuiGo as “third class” service”

    Hmm, coincidence? This is where unions utterly fail–there’s more to life than maximum employment for union members, and improving train ridership is one of the many, many things that fall under that category.

    • tbert

      And this is where public conception of unions utterly fails-in assuming that unions exist for some reason *other than* full employment for their members.

      • Andre L.

        Yonnah, I think you are wrong about the fare realities of German rail travel.

        You can find easily fares on DB website for as low as 49 euros for any pair of German cities served by DB trains.

        These practice of marking up ICE over regular IC trains in a consistent and proportional manner stopped being a consistent policy couple years ago when they restructured the non-ICE network. They just widened the price range of ICE fares. Actually it is far easier to get cheap fares in Germany than in France if you buy in advance.

        Italy has gone the same way, especially now that they have serious competition on high-speed services. High-speed offer is up, and many non-HSR trains duplicating those routes were withdrawn or broken on regional routes.

  • The equivalent in the US along the NEC could be a train running from Hoboken to DC, maybe using Bombardier Multi-Levels. This wouldn’t use the capacity-constrained Hudson tunnels, and with a less convenient starting spot and less space wouldn’t cut too much into the more expensive travel markets.

    • Adirondacker12800

      Hoboken is much closer to Manhattan. Takes ten minutes to get to the World Trade Center and 14 to get to 33rd Street on a PATH train. It’s more like putting the terminal at Newark Airport.

      • Mmmh, forgot about PATH to WTC. On the other hand, Newark Airport is like 15$ away from NYC (no?). If the point is to have 20$ fares to DC (say), then Newark departure may almost double the cost. Plus, if one wants to fill a train with 1000 seats, a couple of rapid transit connections would be useful. Maybe Newark Penn station would work better?

        On the other hand, the proposed service would be slower than the existing NEC trains, and more cramped (still better than any flight!). So if you consider that it takes 10mins for wtc-Hoboken, and 8minutes for wtc-penn on the 3 train (plus some walking), then the Acela is still much faster, and the Northeast Regional still faster, meaning the businessy people going wtc-dc should still choose existing Amtrak options.

        • It depends on your destination in New York. For Lower Manhattan destinations, it’s faster to connect to PATH. The same is also true of most of Brooklyn. The difference in time is not enough to make up for the transfer penalty, but a) it might be enough for the origin-end transfer penalty, which is lower than the destination-end one, and b) the transfer penalty is an average, and some trips (e.g. single traveler, regular traveler who knows the connections, light luggage) exhibit lower penalties.

    • There’s a lot of merit to the idea of reduced-price Amtrak trips from Hoboken (or Newark!) to DC.

      • Adirondacker12800

        Ant6n, takes time for an Acela or a Regional to get between Penn Station NY and Penn Station Newark. When PATH was the Hudson and Manhattan, partly run by the Pennsylvania RR, the World Trade Center, then Hudson Terminal, was a full fledged railroad station. You could check your bags there etc. It appeared in the long distance timetables. As did departures from Jersey City. An extra ten minutes in the schedules I’m looking at. If you are starting out in lower or Manhattan or Brooklyn going to Newark maybe faster. No long subway ride uptown to 33rd Street. Getting from Hoboken to Newark isn’t particularly fast either. 22 minutes on a train I was able to find with the NJTransit trip planner.

        Amtrak doesn’t have the cars to be able to do it. They scare up extra cars on Thanksgiving weekend by renting NJTransit or MARC trains. ( Could in theory use Silverliners too ) But NJTransit, SEPTA and MARC don’t have extra cars laying around either. Somebody wants to go out and buy excess Amfleets in 2017 and some broken down HHP8s they should go for it.

        • For equipment, all that would be needed would be two locomotives and 16-24 passenger cars. This could make two consists. If we assume a ~4 hour running time (still beating the bus), 4 trips could be made per day, i.e. a trip every 4 hours with two trains. Passenger cars could be leased (MARC should be getting new bilevels this year) or bought (for 3 million each). Locomotives exist (Shouldn’t the new Amtrak electrics start to be delivered this month?).

          If no rolling stock exists in the North East, how come Atlantic City Express Service could have 8 bilevels in total, and locomotives, seemingly out of thin air?

          • Adirondacker12800

            The 8 multilevels came from the same place the NJTransit and AMT multilevels came from, Bombardier. From the Wikipedia article:
            Because of delays in acquiring the cars and preparing the needed motive power (the 8 cars for this service are part of a larger 329-car order, and the four diesel locomotives were acquired from Amtrak), the service did not begin until February 2009.

            • Yes, equipment can be purchased, what’s the big deal? If 120 people per car pay 20$ each, on 4 runs per day, then the 3 million car with a life span of 40 years is paid off in around 300 days of service. That’s simplistic but should give you an idea that well-utilized rolling stock pays for itself.

              Anyhoo, I jotted down some ideas regarding the possibility to use commuter rail rolling stock that just sits around during most of the day (off-peak), to be used for exactly this kind of service.

              • Adirondacker12800

                Four hours to get there and four hours to get back means you want to take the train away in the middle of rush hour and not bring it back until rush hour is in full swing. Rush hour in the Northeast runs from 6 in the morning to 10 and from 3 to 7 in the evening. The first Trenton express of the day goes to New York, turns around and carries another load of passengers to New York later in the rush. Or turns around, goes to Jersey Ave and carries another load of passengers during the rush. The same thing happens with all of the other commuter agencies. For a few hours in the morning and a few hours in the evening everything is in service. It’s why the only time the Train to the Game from the New Haven line to the Meadowlands runs is on Sunday afternoons. Any other time they wouldn’t be able to get the train back to New Jersey, have it serviced and be ready for the morning rush.

              • It means nothing what you say.

                First I was trying to show that the full utilization period is smaller than rush hour itself, leaving a large period during the day where not all equipment is used.

                Secondly I stated (explicitly) that for runs of 4 hours or more, there’s not enough time to do a return trip during mid-day. That’s why I propose a single 4h+ run during mid-day, followed by commuter rail duty in the destination city, and return later that day or on the next day. If two trains do that concurrently, then a NJ Transit train will be on commuter duty in DC while a Marc train while be on commuter duty in New Jersey for the evening rush.

              • John W

                @Adirondacker – it would work if you could get two agencies willing to trade off on a daily basis. Train 1 serves the morning rush in NJ, midday low-cost trip to DC, afternoon rush in VA or MD. And its northbound counterpart does the southern commute in the morning and the northern one in the afternoon.

                It would require a different attitude to branding, and an unheard of level of inter-agency cooperation, however.

              • which gets back to my original point, that France has a rail network with depth and breadth which makes this kind of concept possible, and the US doesn’t. And that the capacity, and capacity includes equipment of the Northeast Corridor isn’t great enough to do be able to accommodate this idea, even though it’s a cool idea.

                And in fact, the “breadth and depth” of the roadway network is what enables the BoltBus/Megabus/Chinatown bus type operations.

            • david vartanoff

              on fleet utilization it is worth noting that PRR bought two Congressionmal trainsets in 1952 which each made 3 trips a day (NB,SB,NB and the other SB,NB,SB) on 3:45 schedules. At the time these were the elite, faster trains.

  • How many conductors are there per train normally? One per two cars (so, eight on two coupled trains)?

  • You make a very good point about the model, like low cost airlines. I think another example at least from the US is the equivalent of Chinese and then other intercity bus competitors (like Bolt Bus) against Amtrak in the Northeast Corridor, but then also Megabus services in other areas of the country, such as out of the Midwest.

    If you look at the book by Richard Foster _Innovation: The Attacker’s Advantage_ (personally I don’t think the book reads well, but it has really important concepts), it discusses these kinds of issues, of how to ward off competition, by supplanting potential competitors.

    (Clayton Christensen has an alternative but comparable thesis called “Disruptive Innovation” but I think that Foster was really first with this general concept.)

    I think your analysis is very interesting, including to the extent of using “second tier” stations just like how Southwest Airlines uses secondary airports.

    SNCF needs to lay out this alternative scenario to the unions, to demonstrate that they are focused on maintaining, if not increasing market share, and reaching new market segments.

    What’s super interesting is that they have enough network breadth and depth to be able to do this. As you know, it’s not possible at all in the US on either dimension.

    WRT comments above about Hoboken etc. as alternative embarkation points for cheaper prices, I don’t think it really works. For one, after the initial station, it becomes difficult to find seats. It’s not like there is a lot of spare capacity on the Northeast Corridor. And I am not sure that price wise they can compete with the specialized bus services.

    (E.g., a couple Saturdays ago I went to Philly for a day trip to attend a conference. It cost me about $25 on the bus. It would cost $100 on Amtrak. Amtrak is faster and more comfortable, but I don’t make enough $ to be able to justify such a cost difference.)

    You could argue that regional commuter services prprovide some of this alternative, at least in some line segments on the Northeast Corridor. E.g., those in the know–but you can only do it during the week–know to ride between DC and Baltimore via MARC rather than Amtrak. A trip to BWI airport costs $15 by Amtrak and $6 for MARC. Amtrak trains do have priority though on the line.

    • Eric

      Yes, you can also do NY-Philadelphia via NJ Transit and SEPTA, transferring in Trenton. It’s cheaper, but you have to sit through a couple dozen local stops. So not even competitive with the Chinatown bus (except perhaps regarding safety).

    • Richard,

      WRT comments above about Hoboken etc. as alternative embarkation points for cheaper prices, I don’t think it really works. For one, after the initial station, it becomes difficult to find seats. It’s not like there is a lot of spare capacity on the Northeast Corridor.

      I think you’re confusing what is proposed here: if we mirrored this French service on the NEC, the spare capacity would not be an issue, because these would be new trains. And the alternative termini would also not be an issue, as the trains would not continue to the main terminal.

      For example, a train serving the DC to New York market would probably leave from New Carrollton instead of Union Station, and stop at Newark, not New York. The train would not then run into Penn Station.

      As Yonah noted in the article, the reason to do this would be because of a) congestion at the terminals, and b) the associated track fees with using those terminals.

  • CityBeautiful21

    One major reason for this service pattern is that the public agency that owns the tracks (RFF) charges SNCF (also a public agency) more for the use of tracks in suburban areas than those in the center city.

    I’m confused about the track charges from RFF and how that encourages SNCF to have termini for these routes in suburban areas. If RFF charges *MORE* for suburban track access, and the trains are getting LESS revenue per seat, shouldn’t that encourage SNCF to keep their lower-revenue trains in city center stations and out of suburban ones?

    Or is this a typo?

  • David Nelson

    would someone confirm this Ouigo is a bi-level car? If so, would someone send a link to their car design and layout? I was told there’s no such a high-speed bi-level train services (I read one of those train magazines years ago and was under the impression it was high speed).

    I know Amtrak Superliner is taller than MARC/VRE/NJTransit bi-level cars (that’s why they’re able to get into tunnels in DC,Baltimore, and NYC).

    Thanks.

  • Andrew

    To get from Lyon Airport to the city centre you have to take a special tram line which serves the airport, which costs 15 euros (13.50 euros if you book on the internet). There is no other public transportation serving the airport, and the airport TGV station is currently poorly used because few people live near it. Because of this, this “low cost” TGV service will probably not be very successful.

    • CityBeautiful21

      This will be the interesting test. If they’re aiming to capture auto users, the lack of proximity of residents and limited transit service may be overcome by park-and-ride activity. It seems that is their hope, anyway.

    • Andrew

      Also the Ouigo service does not serve CDG Airport (one stop north of Marne-la-Vallée). Numerous existing TGV trains run from Lille to southern France via CDG and Marne-la-Vallée, but SNCF seems to have deliberately avoided running Ouigo service to CDG Airport (where many air travellers transfer to trains, in contrast to the underused Lyon Saint-Exupéry station) or Lille (where there is a connection to Eurostar and Thalys). There is one Ouigo train a day which goes from Marne-la-Vallée to Lyon city centre though, the others go via Saint-Exupéry airport to the south of France.

  • “France’s SNCF national rail service has, since the introduction of the TGV in 1981, held to the belief that fast trains should not be segregated to serve only higher-paying passengers.”

    Except for a short period around 1996 with the ‘TGV Vert’, TGV has always been more expensive on a like-for-like basis, than Grandes Lignes. From the beginning, TGV PSE required paid-for compulsory reservation, and when TGV Atlantique started its ‘Resa’ combined supplement-reservation was backported to PSE.

    Ouigo is an inter-betterave advance purchase cattle truck gimmick. There is no justification for ‘RFF charging more for track access to city termini’, and RFF is not truly independent of SNCF.

    • Andre L.

      If RFF started charging less, new competitors could be attracted for slots on central stations, and they could require some competitive tendering of these slots to operate their own trains. At least this is how things are supposed to work from late 2014 onwards.

      Therefore, RFF increases the price of these slots as deterrence for new entrants.

      The only real solution for competition there is for a strong RFF that is politically cut-off from SNCF, which should be fully privatized.

      • G. Hughes has written a nice description of track fees imposed by RFF on his blog; I have also referenced it in an update to this post, above.

        RFF is not increasing the price of central station slots to “deter new entrants.” It charges more for sections of the system, including both track and stations, that are more used and more in demand. This is market pricing that will apply equally to SNCF and all future competitors.

        There is no political support for privatizing SNCF, nor, in my opinion, much evidence that doing so would improve anything, considering the company is well managed and effective in providing services.

  • DBX

    Curious as to whether the second carry-on provision will actually stick. It will take a significant change in operational culture and organization to enforce that in open train stations with as many as two-dozen active entrances on a train, all in an unchecked-baggage environment.

    More generally, I think there’s a serious and legitimate question of how the EU will handle track access fees. The bureaucratic culture in Europe for some time has taken a dim view of cross-subsidization, yet cross-subsidization in the form of high access fees on trunk routes and next-to-nothing ones on branch lines is absolutely essential to maintaining a true national network. It runs the risk of recreating the Beeching Axe from Britain in the 1960s if bureaucrats follow their cost-cutting noses rather than a broader grand vision of the future.

  • William

    Only 4 conductors? Wow. While no expert, I think Swedish trains have 1 or 2 conductors, so calling 4 “only” sounds really odd.

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