SNCF considers price capping after Covid
The train operator could introduce price caps on TGV services to entice passengers back, as it anticipates a loss of €5billion in 2020 due to Covid
French train company SNCF may introduce a cap on the price of all TGV tickets, in a bid to change the trains’ reputation as an expensive way to travel and entice travellers back after the Covid-19 pandemic.
The idea is only hypothetical at the moment, but should it be introduced, it would mean a cap on all prices for all tickets, including in First Class, on full-price InOui journeys, and on the company’s budget service, Ouigo.
It comes after SNCF reduced prices on four million tickets over the summer, and even considered abandoning its long-held slogan “the earlier you book, the cheaper the ticket”.
SNCF is seeking to attract travellers back to the trains after the industry was hit hard by the Covid-19 pandemic, and put a new structure in place that will better respond to the change in demand.
Traveller numbers on trains have dropped significantly due to Covid-19 and lockdown, and the company has warned that it anticipates losing as much as €5billion in 2020 alone.
During the most recent confinement - despite data suggesting that people were travelling more than during the first lockdown - SNCF had to cancel 70% of its planned services and demand for TGVs dropped for the first time in 40 years, due to people travelling less and more people working from home.
But SNCF CEO Jean Pierre Farandou, has repeatedly said that the health of TGV traffic is key to the health of SNCF as a whole.
He said: “For the group [as a whole] to do well, TGVs must do better.”
In September this year, Mr Farandou acknowledged that the TGV is seen as an expensive way to travel, and that pricing is currently not clear enough.
He said: “Summer went well, better than we expected at the beginning. But we are a little more worried about business clients, who represent 15% of all customer traffic in normal circumstances and 30% of TGV InOui traffic, and more so financially.”
The goal is therefore to bring back passengers at the right price in difficult economic times - especially business passengers, the numbers of which have dropped especially sharply due to more people working from home.
Business passengers on TGVs normally represent a third of passengers, but half of takings, and are key to the services’ success.
To help revive it, SNCF is not only considering introducing a cap on prices but also improving its technology to make it easier to book. This is likely to include centralising all services and bookings on a single phone app, which will also offer real-time updates to all travellers.
Mr Farandou has said that he expects it will take “around two years” to get customers back to pre-Covid levels.