MISC | Yield Management in Railways

[Suburbanist]

Well, so for your demands your system works ok. As for me, I'm happy the Italian major train operator see the airplane as its competitor. I don't mind driving in Italy, it is quite funny and as long as more and more Italians rely on car, pressure mounts to keep expanding freeways all over the country, which is a huge advantage for people like me.

Now, it is the time of southern regions see the arrival of high-speed lines, or at least vastly improved "classical" lines to velocities up to 200 km/h. Because that region is rugged and offers significant geological challenges, Italy will have no money to revamp minor railways or local services anytime soon in the next decade.

[NCT]

Why can't some people accept that railways (high-speed or classic) are a public service that need to be all-emcompassing.

They also need to recognise, that unlike long-distance airlines, railways face competition from both roads (short-medium distance) and air (medium-long distances). Monopolistic yield-management is the last thing rail companies need, because that will sure price people off the trains and onto the alternatives.

People make frequent rail journeys - they use them for commuting purposes, or frequent day visits to and from remote client sites. With HSR commuting distances of 200+ km is NOT unusual. Railways need to be flexible and cost effective, so anytime tickets and passes are absolutely essential. This is one passenger group a certain poster completely disregarded when talking about his price discrimination. Get your market analysis right!

[poshbakerloo]

I like the convenience is getting an express train to London, just as easy as hopping on a subway train!

[Suburbanist]

As I said before, I support government-backed track ownership and maitenance like I support government-backed higway ownership and maitenance and airport ownserhip and maitenance.

Companies should be able to run their trains whenever they want, and if there is more demand than capacity, put slots of traffic on auction, giving them in a 3 to 5 years period to the highest bidder.

Yield management exists to maximize revenue, not ridership. If I can extract more net revenue from 100 passengers, why extract less money from 200?

Passes are way too subsidized, therefore I'm against them. There is no way a high-speed rail can carry passengers 200km back and forth daily for a whole month for € 199 like in some special fares.

All-year comprehensive passes fares are usually anti-economic (like the DB 100 Bahn Card). They are bought by people who need to travel heavily around the country, who would otherwise spend thousands or more than a dozen thousand euro on road or air transport. It would be like the government providing me with a fixed-pass to all gas stations in the country, so I could fill up how much I want; or some airline charging you, say, 10.000 euro for unlimited travel in Europe in a whole year.

I'm yet to see a monthly pass scheme that pays, at least, its marginal operational cost.

Car is convenient because people pay roughly the same to travel all the time. There is no economic reason for oil suppliers to offer "advanced purchase plans". Public transport companies, on the other hand, can maximize their revenue managing their yield. When I travelled a lot in Italy in HSR I get used to see people arguing with the inspectors because they had lost their early train and didn't want to pay hefty penalties to change their fire-sale promotional ticket. I've also contended with a lot of old-style users who get upset because I usually requested them to vacate my carefully chosen and reserved seat for which I had paid. They used to complain that seat reservation is for "dumbasses".

So, convenient transport = car. Every attemp to counteract this will be made at expense of taxpayers, so I'm against. I do not mind paying high tolls and, to a certain extent, gas taxes (as long as they fund only the costs of highways, pavement, health treatment for injured car passengers etc.). But I'm totally upset to feel that people who want the "convenience" of hopping in a Firenze train to Rome like it was a tram doing that in a daily basis at expense of my hard-earned money I spend at the pump.

[aab7772003]

Suburbanist, stop blabbing such nonsense. MANY people HATE driving and do not want to be bothered with the enormous costs of maintaining their own cars. In fact, many people as drivers in North America ONLY get to the point of feeling comfortable with driving to work and shop in fair weather and normal traffic conditions in their entire lives. On the other hand, quite a few countries do the opposite by artifically keep the price of oil way low at the expense of tax payers. Why do non drivers have to subsidize drivers and the profits of petroleum companies in these countries?

In fact, more and more people know how much their flights should cost thanks to the internet. Airline yield managment system is actually crumbling in the age of the internet.

Originally Posted by Suburbanist

Every attemp to counteract this will be made at expense of taxpayers, so I'm against.

That´s right, at the expense of the taxpayers who love to drive, which is not everybody. No wonder car lovers are against the true cost of freedom and on-demand convenience becasue they want to enjoy what they love to do for as little as possible In the US, companies are really good at charging consumers high premium for uncompromising on-demand convenience. This is how the real market economy works!

The real title of this thread should be "Suburbanist loves to drive and be subsidized for his beloved lifestyle."

Originally Posted by Suburbanist

I don't mind driving in Italy, it is quite funny and as long as more and more Italians rely on car, pressure mounts to keep expanding freeways all over the country, which is a huge advantage for people like me.

[mozatellac]

Originally Posted by Suburbanist

Passes are way too subsidized, therefore I'm against them. There is no way a high-speed rail can carry passengers 200km back and forth daily for a whole month for € 199 like in some special fares.

All-year comprehensive passes fares are usually anti-economic (like the DB 100 Bahn Card). They are bought by people who need to travel heavily around the country, who would otherwise spend thousands or more than a dozen thousand euro on road or air transport. It would be like the government providing me with a fixed-pass to all gas stations in the country, so I could fill up how much I want; or some airline charging you, say, 10.000 euro for unlimited travel in Europe in a whole year.

I'm yet to see a monthly pass scheme that pays, at least, its marginal operational cost.

First off, do you have any idea what the marginal operational cost is on a train? Go ahead, estimate it. We'll laugh.
Did you know that in France, Italy, Belgium and Spain you had to pay a >10€ reservation fee to board a high-speed train, even if you have an intercity rail pass? http://www.interrailnet.com/interrail-special-trains

Originally Posted by Suburbanist

Car is convenient because people pay roughly the same to travel all the time. There is no economic reason for oil suppliers to offer "advanced purchase plans". Public transport companies, on the other hand, can maximize their revenue managing their yield. When I travelled a lot in Italy in HSR I get used to see people arguing with the inspectors because they had lost their early train and didn't want to pay hefty penalties to change their fire-sale promotional ticket. I've also contended with a lot of old-style users who get upset because I usually requested them to vacate my carefully chosen and reserved seat for which I had paid. They used to complain that seat reservation is for "dumbasses".

So, convenient transport = car. Every attemp to counteract this will be made at expense of taxpayers, so I'm against. I do not mind paying high tolls and, to a certain extent, gas taxes (as long as they fund only the costs of highways, pavement, health treatment for injured car passengers etc.). But I'm totally upset to feel that people who want the "convenience" of hopping in a Firenze train to Rome like it was a tram doing that in a daily basis at expense of my hard-earned money I spend at the pump.

OK, so should your gas taxes fund the costs of diseases due to air pollution? Economically balance the global environmental impacts of car ownership? Should they account for all the space that is lost in road infrastructure and could be used for productive activity (and in many cities, that's a sh*t load of money that's wasted in unused space)? In that case, I'm afraid that you would pay higher gas taxes than most western europeans.

Back to the original subject: regarding the ID requirement, to me this would be counter-productive BS. The ID is not required for security purposes, then it is not required at all. The fact that tickets may be reselled by charters or other companies should be an incentive for them to improve their yield management methods: a yield management system which approaches perfection should be arbitrage-free. And the closer the rail company approaches that, the less money the 3rd party resellers will make.

Regarding the train access control, you are also trying to play with the usual passenger rail system rules here, and to transpose the airline industry system. OK, this would theoretically allow the rail industry to maximize profits (I highly doubt it would in real life). But this poses several problems:
- a practical issue: in the rail system, space inside the stations and time for the users are relatively sparse. Most stations, located within the cities, cannot expand easily. For many users, a 20-minute train access delay overhead (because filtering 1000 passengers takes some time) would definitely be deterrent for rail travel;
- an economic problem: you have to understand that the rail and aviation systems are totally different industries. The cost and demand structures are totally different. You can have deep insights about the future of rail services by looking at the aviation industry, but transposing one system to the other is generally not a good idea, because they are different. The psychological cost of a transfer, the flexibility of the customers' schedules, the financial cost of making several intermediate stops during the service are not the same at all.

[Suburbanist]

Originally Posted by mozatellac

First off, do you have any idea what the marginal operational cost is on a train? Go ahead, estimate it. We'll laugh.
Did you know that in France, Italy, Belgium and Spain you had to pay a >10€ reservation fee to board a high-speed train, even if you have an intercity rail pass? http://www.interrailnet.com/interrail-special-trains

I'm talking about free countriwide long-term transporation passes, like those avialabe in Switzerland, Netherlands or Germany. Interrail passes cater for tourists, cannot be sold for or used by residents in their country of residence railways, and do require reservations as you told. National transport passes, usually covering local transport too, are a completely different program and usually require longer subscriptions.

As for the marginal cost of rail, it is indeed very low, I'd, say, on the 2/3 cents of euro per kilometer. But if there were hundreds of thousands of such passholders, they would start increasing demand to a point were more rolling stock would be required...

It is the same dilemma of car-pooling: I'm commuting alone to my workplace, I'll be spending "x" money per day. If my nearest neighboor starts working in the same place, it would cost me almost nothing more (maybe 4-5% more due to weight increase) to give him a free ride to our common workplace, if, and only if, I'm taking the current situation where I"m already paying all the car costs. However, most reasonable people wouldn't offer such almost-free rides to their neighboors, but instead requiring them to pay usually half of the direct commuting costs like tolls, parking fees, gas and usually a token ammount for maitenance.

OK, so should your gas taxes fund the costs of diseases due to air pollution? Economically balance the global environmental impacts of car ownership? Should they account for all the space that is lost in road infrastructure and could be used for productive activity (and in many cities, that's a sh*t load of money that's wasted in unused space)? In that case, I'm afraid that you would pay higher gas taxes than most western europeans.

Not all pollution is caused by car, they are getting more and more efficient by the day. Electricity and/or heating production from coal, gas or oil account for a higher share of global pollution, but we are not talking about multiplying the price of heating by 6.

Regarding the train access control, you are also trying to play with the usual passenger rail system rules here, and to transpose the airline industry system. OK, this would theoretically allow the rail industry to maximize profits (I highly doubt it would in real life). But this poses several problems:
- a practical issue: in the rail system, space inside the stations and time for the users are relatively sparse. Most stations, located within the cities, cannot expand easily. For many users, a 20-minute train access delay overhead (because filtering 1000 passengers takes some time) would definitely be deterrent for rail travel;

40 years ago one could arrive with 20 minutes in advance and board a domestic flight in air shuttles without bags, essentialy because there were no check-in procedures, no reserved seats and no security: if you had an open ticket (fare fixed by the government) you would show up at the gate, essentialy, and until the plane filled you could just walk in.

- an economic problem: you have to understand that the rail and aviation systems are totally different industries. The cost and demand structures are totally different. You can have deep insights about the future of rail services by looking at the aviation industry, but transposing one system to the other is generally not a good idea, because they are different. The psychological cost of a transfer, the flexibility of the customers' schedules, the financial cost of making several intermediate stops during the service are not the same at all.

Airline costumers don't have plenty of time to spare, but they adjust accordingly to higher-order constraints like security screens. I don't like queuing on security lines, but I accept them because they help keep, to a certain extent, drug traffickers, terrorist and criminals on the ground.

Moreover, airplane seats are far less comfortable than car or train seats. So, increasing journey times, specially overstops, is quite uncomfortable. Landing and taking off also consumes a highly disproportinal ammount of fuel, far far more than decelerating and accelerating in trains.

As for stations, they would have to improve like airport terminals. Modern requirements make aiports an expensive facility that few cities and places can afford to have. I hope improvents in train stations, at least those served by high-speed services, set a new pattern where stations would be billions-worth state-of-the art facilities, where platforms and tracks themselves would be a mere detail in face of advanced body screening areas, food plazas, spas and baggage pre-screening, for instance. That in 2010 we carry our luggage to trains and store them in unsecured places, without any prior check, it is a pity. They should have long implement a system of checked-baggage with trays and so on, like airports: you hop of the trains, take a stroll, and go to the reclaim area.

[k.k.jetcar]

They should have long implement a system of checked-baggage with trays and so on, like airports: you hop of the trains, take a stroll, and go to the reclaim area.

God no! Precisely one of the reasons I prefer taking the train over flying is that I don't have to check in luggage (or be subject to increasingly ridiculous security checks). Airports are one of the last places I want to spend any time- the faster I can leave them, the better.

[nachalnik]

Originally Posted by Suburbanist

As for stations, they would have to improve like airport terminals. Modern requirements make aiports an expensive facility that few cities and places can afford to have. I hope improvents in train stations, at least those served by high-speed services, set a new pattern where stations would be billions-worth state-of-the art facilities, where platforms and tracks themselves would be a mere detail in face of advanced body screening areas, for instance.

No.

Railway infrastructure is already expensive enough. I'm not only talking of investment, but also of maintenance.

With all the high-tech of current state-of-the-art railway lines and stations it's very hard to earn the money to cover even the additional variable costs (for maintenance) of new/improved railway infrastructure, and here we don't even think of a return of investment (possible only if you think in overall-economic terms of the whole state).

So the aim must be to reduce complexity.

And your suggestiuon is exactly the opposite of that.
High-tech devices for passenger checks cost money in investment and maintenance, additional staff is required, as well as additional room (from where to get this in densely populated downtown areas???).
And also dedicated platforms for long-distance trains (now the same platforms are at other times used for local trains) might sometimes require more platforms due to less flexibility.

Your ideas make railway transportation much more expensive.


Nachalnik

[NCT]

The fact that differences exist between railways and airlines is NOT an accident. The FACT that railways are becoming increasingly popular is that railways offer conveniences air travel does not - city-centre locations and more passenger-friendly boarding procedures being two of them.

Passes are an integral part of price discrimination. Without them you don't generate any revenue from the commuters who would simply chose other means of travel

- With high capacity usage during the peaks, the seemingly prices ARE justified.
- Maintaining a minimum level of service during off-peak times means a lot of spare seats. Passes and cheap tickets are a way of increasing 'bums on seats'. Even if a loss is still made on that particular journey, those cheap ticket holders at least cover the fix costs.
- National and international passes are sometimes a customer relations tool. Most people only travel relatively fixed routes between fixed points - but an 'unlimited national travel' pass is far more sellable than a 'fixed route there and back' pass, even if the latter reflects what most people do.

Whoever operate the trains HAVE done their homework before they set their prices - so would somebody please stop trying to think they know better!

[Suburbanist]

As something in the field of ecomics, believe me I've seen a lot of people doing this terribly wrong for other reasons, in the case, to begin with the fact that almost every European rail company is public, public-owned or heavily regulated and subject to every source of political interference - student passes to start it, as there would be no reason to give students "discounts" so they can ride freely or paying a fraction of the fair price.

Rail is seen as an utility rather than a service, and politics quick in a plethora of ways: avoiding shutting down inefficient lines, stalling price increases to discourage car travel in the name of global warming etc. etc.

Once train operator are private (I'm not saying track ownership would be, just the train operations) and free of ever requirement like "run an early train with coordinated scheduled to allow people to get to school before classes begin", then I'd say prices and prices schemes would be arguably set in the most reasonable way, sistemic unprofitable routes shut down (those who do not provide enough revenue themselves or to feed the whole system) etc.

If you want a "backbone" system, and for sure every industrialized country needs on, you have road, freeways and cars, trucks and vans to run on it. They are a "public good", widespread tracks are a public good; scheduled services are just a convenience.

[NCT]

Originally Posted by Suburbanist

As something in the field of ecomics, believe me I've seen a lot of people doing this terribly wrong for other reasons, in the case, to begin with the fact that almost every European rail company is public, public-owned or heavily regulated and subject to every source of political interference - student passes to start it, as there would be no reason to give students "discounts" so they can ride freely or paying a fraction of the fair price.

Rail is seen as an utility rather than a service, and politics quick in a plethora of ways: avoiding shutting down inefficient lines, stalling price increases to discourage car travel in the name of global warming etc. etc.

Once train operator are private (I'm not saying track ownership would be, just the train operations) and free of ever requirement like "run an early train with coordinated scheduled to allow people to get to school before classes begin", then I'd say prices and prices schemes would be arguably set in the most reasonable way, sistemic unprofitable routes shut down (those who do not provide enough revenue themselves or to feed the whole system) etc.

If you want a "backbone" system, and for sure every industrialized country needs on, you have road, freeways and cars, trucks and vans to run on it. They are a "public good", widespread tracks are a public good; scheduled services are just a convenience.

Wrong at every level. Public transport needs to be seen as 'always there' for people to want to use it. If public transport is seen as a pure money-making machine for shareholders then the public are not going to use it. It can only win trust and loyalty if it's seen as a caring institution.

Not everyone has access to public transport, especially the young and the old. Public transport needs to be there for as much as possible to care for the lowest common denominator.

[aab7772003]

Nonsense.

What "public good" do empty tracks, bus stations, etc. offer?

Nothing.

[MarcVD]

International passenger traffic in Europe has been opened to alternative
operators since the begin of 2010. Since then, anyone who wants to
run a passenger rail service between two cities located in two different
countries can do it. If there is a market for such an airline-like railway
company, candidates tu run it should appear... As far as I know, only
one company (the Italian FS) applied to run a Paris-Milan service, but
nothing materialized yet. For the time being, the only company that more
or less operates in an airline-like style is Eurostar, and they are highly
criticized for that, more than anything else. I do not think that this would
get much in the way of support by the travelling public.

[nachalnik]

Originally Posted by MarcVD

International passenger traffic in Europe has been opened to alternative
operators since the begin of 2010. Since then, anyone who wants to
run a passenger rail service between two cities located in two different
countries can do it. If there is a market for such an airline-like railway
company, candidates tu run it should appear... As far as I know, only
one company (the Italian FS) applied to run a Paris-Milan service, but
nothing materialized yet.

OeBB and DB started to run trains from Munich till Milan, Verona and Bologna since december 2010. They ended the cooperation with Trenitalia and now run their own trains in Italy in cooperation with Trenitalia.

Earlier Trenitalia required, that only so-called "Global-price"-tickets are sold for these international trains.
Now OeBB and DB sell km-based tickets again. And: In Italy all tickets are available on board of the trains without any supplement.

In Austria a new private railway company will compete with OeBB from december 2011. The "Westbahn" (see http://www.westbahn.at/) will run hourly trains between Vienna and Salzburg (317 km rail distance).
And another "big surprise" about ticketing: No yield-management, tickets will be sold via internet and on board of the trains at the same price.
It has been announced that the tickets will cost the about the same as a 50%-discounted ticket of OeBB (most OeBB train passengers have a "Vorteilscard", which gives 50% discount), but there will be no further discounts.


Yield-management makes sense only for trips > 500 km or so, if the plane is the main competitor.


Nachalnik

[MarcVD]

Originally Posted by nachalnik

In Austria a new private railway company will compete with OeBB from december 2011.

A few countries in Europe have decided to open their domestic markets
in advance, which is good. None of those alternative companies opted
for an airline-like service, as far as I know. In the past, there were some
trains operated like ground flights by DB for Lufthansa. This service has
disappeared. There was also this "metropolitan" service offered by DB
between Köln, Dusseldorf, Essen, and Hamburg, also operated more or
less like an airline. Failed miserably, lasted only a few years. If Eurostar
only had a competitor operating trains like trains and not like planes,
no doubt that passengers would flee from Eurostar in masses. Just by
not requiring a reservation, the ICE services between Brussels and Köln
have a better patronnage than the Talys service on the same line. Do I
need to go on ?

[Crownsteler]

While you do definatively have some points, the problem is our points of view are radically different. You're coming from the producers (operators) point of view, while the rest of us view it from a consumer and societal point of view. You want to maximise profit, the rests wants to maximise ridership. In my opinion, they are one and the same.

As opposed to the airline industry, who have to deal with relatively high marginal costs, the railroad industry has relatively low marginal and high fixed costs (you agree with me on this, don't you). For the railroads it thus becomes more of a point to maximise passengers to maximise profit, as opposed to the airlines who need to optimise passengers to maximise profit. After all, profit is maximised when MC=MR.
Maximising passengers becomes even more important when the minimal timetable is regulated, and the operator has (virtually) no control over its fixed costs.
No, the two industries are completely different, from both the supply and demand side, thus what works for one will almost certainly not work for the other. You yourself have been giving examples that it just doesn't always work. ( I travelled a lot in Italy [...] fire-sale promotional ticket. I've also contended with a lot of old-style users [...] seat reservation is for "dumbasses".)
I do agree though that what you are proposing is more cost effective.

Now, you want it to be more like airlines, and yet you give examples which show it isn't the shining beacon you like it to be. ( 'Airline costumers don't have plenty of time to spare' and 'I don't like queuing on security lines') If you want to succesfully compete you need to offer a better product, yet you are wishing the railroads to fall in the same pitfalls as the airlines.

Now, to some more specific points.

All-year comprehensive passes fares are usually anti-economic (like the DB 100 Bahn Card). They are bought by people who need to travel heavily around the country, who would otherwise spend thousands or more than a dozen thousand euro on road or air transport. It would be like the government providing me with a fixed-pass to all gas stations in the country, so I could fill up how much I want; or some airline charging you, say, 10.000 euro for unlimited travel in Europe in a whole year.

Aside from the fact that most of these passes are mostly instituted by the operators themself, whom I imagine did a proper cost-benefit analysis on it? Using your estimate for the marginal costs per passenger kilometer of 3 cents, and the price of an NS year pass of about €3.500, than the average person needs to travel about 300 km every day for MC=MR. I doubt many people do that.

Voila, a (yearly)pass scheme which pays its marginal costs.

There is no economic reason for oil suppliers to offer "advanced purchase plans".

You are sure? I know plenty who do. Electricity companies, airlines and I imagine shipping companies as well, all buy (part of) their energy supply at a fixed price. It is simply a matter of hedging, you must know that. Hell, you could do it yourself if you wanted to, probally not worth it though.

So, convenient transport = car. Every attemp to counteract this will be made at expense of taxpayers, so I'm against.

Partly true, except that for your convenient transport to be possible you require huge subsidies from the government and society. But let me come back to that later.

It is the same dilemma of car-pooling: I'm commuting alone to my workplace, I'll be spending "x" money per day. If my nearest neighboor starts working in the same place, it would cost me almost nothing more (maybe 4-5% more due to weight increase) to give him a free ride to our common workplace, if, and only if, I'm taking the current situation where I"m already paying all the car costs. However, most reasonable people wouldn't offer such almost-free rides to their neighboors, but instead requiring them to pay usually half of the direct commuting costs like tolls, parking fees, gas and usually a token ammount for maitenance.

Irrelevant. If you want to maximise your profit you'll carry any passenger who will offer you more than your marginal costs. Whether you think it is reasonable is irrelevent, remember MR>MC.

Not all pollution is caused by car, they are getting more and more efficient by the day. Electricity and/or heating production from coal, gas or oil account for a higher share of global pollution, but we are not talking about multiplying the price of heating by 6.

Irrelevent, we are discussing cars their societal costs, not the amount or other sources of pollution.

Cars impose a huge cost on society, which is not limited to road construction and maintenance, not even to injuries as you pointed out. No, these costs also include things as law enforcement, pollution (which causes global warming and disease), congestion (which causes a drop in productivety of workers), noise and light pollution (which disturb sleep patterns and nature), different land usage patterns (from productive (arable) land into non-productive sprawl), and much more.
These are all collective costs bore by society by the collective choice of using the car, it is also called negative externalities. It is only fair for society as a whole to recover these costs for the collective, or internalise them. The easiest way is to tax the offender (appearently) excessively. Not doing so will effectively constitute to, as I pointed out in a different topic, subsidising it. I'm not saying it is necessarily a bad thing, I would just wish people wouldn't go around and say that car usage isn't subsidised.

Public transit has, generally and relative to the car, the opposide effect on the aforementioned social cost. The collective choice to use public transit provides an service to society, has positive externialities, and should be subsidised (at the expense off the car owner) to internalise this.

I know, it is highly theorethical and very hard to quantify, but it is still well respected economic theory.

student passes to start it, as there would be no reason to give students "discounts" so they can ride freely or paying a fraction of the fair price.

From an operaters point of view, no, from a societal point of view, definatly YES. Research has consistantly shown that students in the Netherlands who used the student pass are significantly more likely to continue using public transit after they graduate. It is also prefferable to the government who now doesn't have to award as many scholarships for students moving out (as the government does now).

[mozatellac]

I definitely agree with Crownsteler, except on one point:

Originally Posted by Crownsteler

From an operaters point of view, no, from a societal point of view, definatly YES. Research has consistantly shown that students in the Netherlands who used the student pass are significantly more likely to continue using public transit after they graduate. It is also prefferable to the government who now doesn't have to award as many scholarships for students moving out (as the government does now).

Even from an operator point of view, offering student discounts or special -25yr old fares make economic sense: they are a very particular part of the population, often less rich than average, and therefore have a different demand structure, with very often a strong negative elasticity to price. Different demands imply different market prices, even if we do not account for any societal benefits.

[Suburbanist]

Originally Posted by MarcVD

If Eurostar
only had a competitor operating trains like trains and not like planes,
no doubt that passengers would flee from Eurostar in masses. Just by
not requiring a reservation, the ICE services between Brussels and Köln
have a better patronnage than the Talys service on the same line. Do I
need to go on ?

Eurostar has 70% of passenger traffic between London and Paris, London and Lille and London and Bruxelles markets. Taking a ferry has never been a time-effective strategy. Eurostar agressively practices yield-management and it has still brought air competition to its knees, even considering that London and Paris are among the busiest air hubs in the World.

Thalys is another huge success, having literally shut down the air shutlle on the route Bruxelles-Paris - and posed to do the same in the Amsterdam-Paris route now that HSL-4/HSL Zuid has been completed. It is one of the most agressive companies pursuing yeild management and wisely turning away backpackers on chear European passes requiring them to pay hefty reservation fees.

Originally Posted by aab7772003

Nonsense.

What "public good" do empty tracks, bus stations, etc. offer?

Nothing.

The same public good an open railwyay offers, even considering that government will not own cars and trucks, for instance. Public good exists by providing and maintaining and infrastructure that can be used by private operators at will - or not used at all -.

Originally Posted by NCT

Wrong at every level. Public transport needs to be seen as 'always there' for people to want to use it. If public transport is seen as a pure money-making machine for shareholders then the public are not going to use it. It can only win trust and loyalty if it's seen as a caring institution.

Not everyone has access to public transport, especially the young and the old. Public transport needs to be there for as much as possible to care for the lowest common denominator.

Airlines are for-profit enterprises and no more how much people rant about their never-ending ancilliary fees, people keep flying at the millions and runway expansion is on the rise.

Youngs and retirees would have trouble to finance the same level of air travel the working adults do, but this doesn't make airlines obligated to create "student fares" unless they want to.

If you are talking about city or metropolitan mobility I could agree with you to a certain extent (like subsidized tickets/passes students could use ONLY in home-school-library-home routes and ONLY during school days). However, I cannot see why travelling from, say, Milano to Roma or from Sevilla to Zaragoza, or from Philly to Boston, should be an entitlement.

Originally Posted by nachalnik

OeBB and DB started to run trains from Munich till Milan, Verona and Bologna since december 2010. They ended the cooperation with Trenitalia and now run their own trains in Italy in cooperation with Trenitalia.

Earlier Trenitalia required, that only so-called "Global-price"-tickets are sold for these international trains.
Now OeBB and DB sell km-based tickets again. And: In Italy all tickets are available on board of the trains without any supplement.

In Austria a new private railway company will compete with OeBB from december 2011. The "Westbahn" (see http://www.westbahn.at/) will run hourly trains between Vienna and Salzburg (317 km rail distance).
And another "big surprise" about ticketing: No yield-management, tickets will be sold via internet and on board of the trains at the same price.
It has been announced that the tickets will cost the about the same as a 50%-discounted ticket of OeBB (most OeBB train passengers have a "Vorteilscard", which gives 50% discount), but there will be no further discounts.


Yield-management makes sense only for trips > 500 km or so, if the plane is the main competitor.


Nachalnik

As long as they are free private or private-like operating companies, let them price the tickets as they want to. I only have concerns about standing passengers in long-distance trains: I'm totally opposed to that on safety grounds. Trenitalia is harvesting good money with their practices of yield management, I'm eager to see them expanded to all train services besides regionals.

Now, a personal note: I don't mind paying some extra euros to reserve my seat on ICE services when I use them. However, it drive me nuts when one of those "drop by" passengers refuses to give up their isolated first-class seats I usually reserve. Germans usually get up at the mere approaching of someone with a ticket, but overseas tourists taking ICEs in Frankfurt usually protest having being asked to move out.

[Crownsteler]

Originally Posted by mozatellac

Even from an operator point of view, offering student discounts or special -25yr old fares make economic sense: they are a very particular part of the population, often less rich than average, and therefore have a different demand structure, with very often a strong negative elasticity to price. Different demands imply different market prices, even if we do not account for any societal benefits.

Ah yes, I was comming from the Dutch perspective where students are entitled to free public transit. Giving discounts to students is actually very sensable, as they generally travel well spread out over the day and avoid peak hours. Any passenger carried outside peak hours is instanteniously profitable.

Eurostar has 70% of passenger traffic between London and Paris, London and Lille and London and Bruxelles markets. Taking a ferry has never been a time-effective strategy. Eurostar agressively practices yield-management and it has still brought air competition to its knees, even considering that London and Paris are among the busiest air hubs in the World.

Thalys is another huge success, having literally shut down the air shutlle on the route Bruxelles-Paris - and posed to do the same in the Amsterdam-Paris route now that HSL-4/HSL Zuid has been completed. It is one of the most agressive companies pursuing yeild management and wisely turning away backpackers on chear European passes requiring them to pay hefty reservation fees.

And yet both are struglling to be profitable?

Airlines are for-profit enterprises and no more how much people rant about their never-ending ancilliary fees, people keep flying at the millions and runway expansion is on the rise.

Airlines have a near monopoly on medium to long range travel, of course people are going to use them. Yet when a competative alternative opens people flock to it.