The key rail services of interest to business travellers in France, particularly TGV, are managed by the Voyages SNCF division. In 2014, revenues were down by 1.1%.
The company says, "The TGV business model must be revamped entirely: profitability has plummeted despite major productivity drives." This is what our chart of the week shows — the halving of profits at this division in the past decade.
The company says that the issue is a combination of economic stagnation and increased competition from car-sharing, particularly the hugely successful BlaBlaCar, and low-cost flights. The increase on 1 January 2014 of VAT on rail tickets from 7% to 10% has not helped the operator either.
The light at the end of the tunnel, if you will excuse the pun, is international rail services. Revenues from the European high-speed rail part of the division rose by 3.8% in 2014.
The company is hoping that itsdoor-to-door service offering for business travellers offering taxis, car pooling and coaches at either end of a TGV journey will help improves its position this year and going forward.
