After our decryption of the actors opening their market and those who position themselves there (here), VERTONE invites you in this new article to deal with the impacts of the opening up of the rail market on traveler experience. Impacts to be taken into account by both historical players and new entrants in order to differentiate themselves.
Impacts on the travel ticket reservation process
Travelers will have more choice …
The first impact to expect is that of increased transport supply. According to the SNCF, opening up to competition has led to a drop in operating costs per kilometer among our European neighbors, which has enabled the Organizing Authorities (AO) to deploy more regional trains in Germany (+ 20% of trains) and to increase the number of traffic in Sweden (+ 50%). The arrival of new players could also stimulate the diversification of the offer, as in Germany where market liberalization has encouraged the return of night trains.
However, the French fear certain side effects of market opening, such asabandonment of insufficiently profitable regional lines for private actors. To guard against this risk, regions can assign lots composed of profitable and less profitable lines, in order to guarantee the balance of the service of the territories, according to Michel QUIDORT (Member of the National Bureau of the Federation of Users and President of the European Federation of Travelers). And while some actors do focus on massive flows of major axes (see SNCF’s Oslo project, aiming to open two new lines in spring 2022, Paris-Lyon and Paris-Nantes, with medium-speed TET equipment), other actors such as Railcoop and the company ” The train », More modest and agile, seek to fill the gaps in the railway network of the territory.
In this competitive environment, the service offer will become a real lever of differentiation for operators, in order to win contracts and attract travelers. It can be enriched at each stage of the journey: reservation, pre-routing and post-routing services, station and on-board services (catering, connected services, etc.).
… and will be encouraged to compare and book with multi-carrier distributors
The enrichment of the offer will therefore give more choice to travelers. The latter will thus be more likely to compare offers between them to select those that best meet their needs: prices, services, options, exchange conditions, cancellation, refund … To find their way around, 79% of respondents the Opinion Way survey (2018) express the wish to access a multi-carrier application or website (platform offering tickets from different operators) such as Trainline, Omio, Oui.sncf …
If this type of service is available online, travelers will also expect to be able to compare and book their tickets on self-service terminals or at counters accessible in stations ; all the more so as Gares & Connexions (a subsidiary of SNCF Réseau) is required to offer the same means to all carriers … However, being the property of the carriers, the self-service terminals and counters do not necessarily guarantee the completeness of the offers . About what continue to accelerate the digitalization of distribution.
Impacts of the opening up of the rail market on the pricing of transport tickets
Limited effects on ticket prices
A number of analysts agree that the prices will not drop for travelers, insofar as they are already relatively low compared to our European neighbors, tickets being particularly subsidized in France. Indeed, the price paid by a French passenger in reality only covers 40% of actual costss on average. Francois ECALLE, former magistrate of the Court of Auditors, estimates that in 2018 state and regional subsidies represented the equivalent of € 224 per year and per French person.
Due to the weight of the subsidies, the effect on the price of TER and TET tickets will mainly depend on political decisions. On high-speed lines (LGV), which are not approved, opening up to competition would tend to lower prices on profitable lines; whereas an increase in prices could be applied to those with lower profitability, or even loss-making. According to SNCF, opening up to competition has made it possible to reduce the price of tickets on high-speed lines in Italy by 15 to 30%, and by 13% in Sweden.
Towards a simplification of price ranges
Certain consumer associations regularly denounce the lack of transparency in the SNCF Group’s pricing policy: the multitude of services available and reduction cards, and dynamic fares make the fare system complex for travelers. Competition could thus bring carriers to simplify their pricing policy to make it more transparent and readable. The company “Le Train” for example, will offer tickets with a reduced price range that will not be based exclusively on yield management. Concretely, this means that traveling during rush hour or on weekends will not necessarily be synonymous with high price.
Impacts on the journey in the station & on board
Combine signage and traveler information to facilitate the journey of travelers
The stations are the place of reception of the travelers and the point of convergence of multimodality. In the big stations, the multiplication of operators will complicate the journey of travelers, who will nevertheless have to orient themselves independently. Travelers will rely on the signage proposed by the infrastructure manager (Stations and connections) and they can always count on the station staff to inquire. Operators will also have a role to play in facilitating their customers’ journey: by developing traveler information they will transmit precise, reliable indications at the right time, to “sign” the route at the station.
The challenge of good correspondence management
Several players will soon be able to operate on the different lines of the French rail network, sometimes on the same lines (especially for high-speed lines). The number of matches and their duration will probably be a choice criteria for travelers. And more than ever, the coordination between the different stakeholders will be a major issue, in particular to efficiently manage correspondence and related disturbed situations. For example, in the case of delays preventing the correspondence of the customer, how to inform him? And what compensation policy to apply? What solution can be offered to the traveler to enable him to reach his destination? At what price and under what terms? These are all questions that concern passengers and that railway players will have to address collectively.
Impacts of the opening of the rail market on the after-sales route
As a consequence of the rise of multi-carrier distributors, travelers will turn to them for after-sales : ticket modification, addition of options, exchange, cancellation, refund, compensation. The multitude of operators will expose customers to different commercial policies, which these distributors must be able to manage directly, or failing that, distributors will have to redirect customers to the customer service of operators who have not opened their after-sales service. (thus adding an additional step and complexity in the customer journey).
Impacts to be addressed at national and European level
By definition, the opening up of the rail market crosses borders; the issues raised above are essential in France and across the continent. There is therefore an opportunity to respond collectively.
In this sense, on March 29, 2021 took place the official launch of theEuropean year of rail, organized jointly by the European Commission and the Portuguese Presidency of the Council of the European Union. The goal is toimprove the image of the sector and attract more people to the railways by promoting it as a sustainable, innovative, multimodal, cross-border, safe and accessible mode of transport for all. On this occasion, railway activities of all kinds will punctuate the year.
Regarding regulations, the European Parliament finalized the modernization of rail passenger rights in the EU April 29, 2021; market liberalization requires the establishment of more homogeneous rules. The new rules will improve the protection of travelers in the event of delays, cancellations or missed connections and will better meet the needs of people with disabilities, according to Adina Vălean, European Commissioner for Mobility and Transport. This European regulation creates minimum rights that each legislation in the Member States and each railway company can improve.
While globally opening up to competition presents effects positive on the experience of travelers, a number of challenges present themselves to operators and distributors. These are all potentials differentiation levers which would allow players in the sector to retain their customers, conquer new markets and collectively develop the modal share of rail.
In view of regulatory changes, the development of passenger rights for more quality of service and increased consumer sensitivity for the ecological criterion, if the various current and future stakeholders manage to agree on the offer, the world of railways has a bright future ahead of it.
An article written by Anaïs Gauthier and Pierre-Olivier Bertrand