» 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have been compressed (unlike the airlines, thank god), but rather because the first class and dining car spaces have been replaced by economy-class areas.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.