The SNCF puts TGV (high speed train low cost Ouigo in Paris to prepare the opening to competition

After having announced in the beginning of the year the idea of placing its TGV train low cost Ouigo at the departure or destination of the parisian train stations in addition to stations of Marne-la-Vallée, Massy, and the airport Charles-de-Gaulle airport, located on the outskirts of the capital, the SNCF pass the act. From 10 December, TGV Ouigo will also from the gare Montparnasse to join Rennes, Nantes and Bordeaux, at the rate of one round-trip daily to Rennes, and two to Bordeaux and Nantes. Sales will be open on 3 October. Because of the toll higher at the start of the capital, the tickets will be a little more expensive than at the start of the stations devices : from 16 euros for adults, 10 euros for the departure of the train stations in the periphery, and a fixed rate of 8 euros for children, instead of 5 euros.

Ouigo should attract 15 million new passengers by 2020

Departures from other parisian railway stations should also be put in place in the course of the year 2018. The development of Ouigo should contribute to an increase in the number of passengers travelling on the TGV. The objective of the SNCF is ambitious. The railway company intends to attract 15 million new travellers in its high-speed by 2020. The number of trains Ouigo is called up to triple within the next three years, going from 12 trains today to 35 by 2020. In this horizon, Ouigo should represent, according to the plans of management, 17% of the offers TGV and carry 25% of passengers, compared to 5% in 2016, more than 25 million passengers, compared with 7 million expected this year. The next year, the traffic Ouigo is projected to almost double “thanks to the departure of the paris train stations”, explained to AFP Rachel Picard, executive director of Voyages SNCF.

The risk of cannibalization

Position Ouigo at the start of Paris is a revolution that cannibalisera necessarily offer high-speed classic. A choice taken by Rachel Picard :

“Yes, of course. A portion of the clients TGV will pass on Ouigo, but we prefer that rather than see our passengers have to go to a competitor. We also prefer to put a client who pays less in a seat that we produce two times less expensive rather than at a TGV. We do not oppose the two offers, but we are building a global offer with the two, offer low-cost, which is an industrial model and a contract with the traveller a different and more constrained, and another offers TGV more qualitative, with a frequency of circulation, very important, ” she said last spring, during a meeting with the press.

Ouigo different of formidable

Today she pointed out that the “differentiation (will be) getting stronger,” between Ouigo, the TGV and low-cost, and formidable, its TGV train classic in which the offer of services will be increasing.

The departure of the Ouigo from the railway stations in paris “does not call into question the economic model” of these trains, said Rachel Picard. It is based on four pillars: to roll the material the more possible to increase the productivity of trains, heavier trains (24% of seats in all), a maintenance carried out at night, and the distribution is exclusively online. Indeed, with trains Ouigo which run 13 hours per day (which allows it to spread fixed costs over a greater number of hours of train) against 6 to 7 hours for a conventional hst, and trains densified may contain more than 1.100 parking spaces when two trains are placed side-by-side, the production cost of the seat per kilometre of Ouigo are 50% lower than those of the TGV.

The Ouigo will also mark the stop at Poitiers, Saint-Pierre-des-Corps (Tours) and Laval, and one round-trip daily Tourcoing, Bordeaux will be put in place.

Opening up to competition

This approach is in line with the perspective of opening up to competition of high-speed lines from 2021. For the SNCF, the future the TGV will pass by a decrease in costs and prices. Not only by the accelerated development of Ouigo, but also by the decline in the costs of conventional hst. This is the trajectory that has decided to take the TRAIN, ” to resist the competition of tomorrow “, as stated recently, Rachel Picard and “give air” to a model which was weakened by the high cost of tolls rail paid for the use and maintenance of the network, and by the fierce competition of other modes of transportation such as car, plane, carpool, bus, and tomorrow other actors in the railways.

The goal for the station is indeed to be able to gain market share while dramatically improving the margins on the TGV and be able to finance the investments. With the high cost of toll rail and the lower prices related to increased competition, the SNCF no longer able to do so.

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