Following on from Madeleine Wahlberg’s article earlier this week, Martha de Monclin has provided us with summary translations of the two le Parisean articles. (Martha warns that they are not word-for-word.)
Article 1: The TGV is slowing:
More than thirty years after its launch in 1981, the SNCF, the flagship of French technology and world champion of high speed rail, is seeing its economic performance deteriorate alarmingly.
In 2008 the TGV had profit margins of 20%. In 2011 this had fallen to 14%, in 2012 to 12.8% and next year should slide below 10%. Similarly, for the second consecutive year, the number of passengers is expected to decline (- 0.3%). The end of an era. One where the TGV largely compensated for the loss-making activities such as freight. And so the Board are looking to reducing costs. The Public company plans to cut more than 1,400 jobs down to 150,000 by not replacing people who leave to retire. And so they will not be hiring an extra 500 people as originally planned.
Lots of people are affected by this. The government as their dream is ebbing away. The economic crisis is not helping as the construction of new lines is expensive and the economic benefits doubtful. Many have been shelved to after 2030. Train users are concerned that less profitable lines will be run down to benefit the lines that make money such as Paris-Lyon. And the train employees are not looking forward to 2019 when the SNCF will be opened up to competition. It is time to look at the business model again.
Article 2: Why the TGV is without a plan
The TGV business model is running out of steam. To such an extent that the directors of the company is promising to sell 1/3 tickets at less that 30€ within the next 5 years in order to keep customers.
TGV – victim of the economic crisis
As many others the SNCF has been directly impacted by the economic crisis. “Less people are travelling” said a union official. “We notice it every day. TGVs are less full. As for business people, who used to travel in 1st class, they now prefer to travel in 2nd. 2013 was not a great year in weather terms and two major train accidents Bretigny (7 deaths) and Saint-Jacques-de-Compostelle (79 dead) also led to less traffic on the TGV.”
When in 1966 the SNCF decided to launch high speed rail, they were aiming to compete with planes and cars. Now its the other way around. EasyJet and Ryanair are impacting province to province TGVs and the SNCF has been unable to adapt quickly enough. Now there are websites offering car sharing and they are taking off. Even though car sharing is only impacting 1% of TGV traffic, it still means a deficit of several million euros.
This is one of the main reasons that the SNCF is running into trouble with its TGVs. The fees that they pay to the RFF (Railways of France) to maintain the tracks keeps going up. In 2013 they rose by 7.4%, 1.5% in 2012, 11.7% in 2011, 11% in 2010. And it is due to continue in 2014. Apparently these rises are justified as there is a lot of line maintenance undertaken every year.
Between 1/3rd and ½ of the lines are uneconomic
Less passengers, energy bills increasing as well as the above fees and salaries means that many lines are losing money. According to the SNCF, 30% are not profitable. This is underestimated according to the FNAUT. They reckon that it was 10% 5 years ago, 30% two years ago and now 50%. When will the decline stop ? To remedy the situation, Guillaume Pepy wants to extend the new low cost TGVs Ouigo which are 40% cheaper to run than the classic TGV.
Tickets too expensive
The main reproach is that tickets are too expensive and yet the SNCF keeps repeating that it is the cheapest in Europe. It is 10% cheaper than in Spain, 30% cheaper than in Germany, except that it peak times, ticket prices are very expensive. “It lets us spread demand” the company says in justification. To break with this image, Guillaume Pepy is promising that all TGVs will cost less from 1st January. And in 5 years, 1 ticket in 3 will be less than 30€.