Why is train travel so expensive in France? The answer from Alain Krakovitch (SNCF)
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“Train tickets are far too expensive in France!” It's a remark we often hear, and one that's the subject of much debate. Where does the money from our train tickets go? Why are TGVs so expensive? After the outside view of Alexis Chailloux (head of transport at Réseau Action Climat), let's take a look “from the inside”. In this second episode of our series on train fares on our podcast Je t’offre un rail ?, it's Alain Krakovitch's turn, Director of TGV-Intercités at SNCF Voyageurs, to give us some answers.
And if you dig a little deeper, you'll soon realize that the question isn't quite so simple... Between the reality of the rail business model, the need to renew a costly rolling stock and the competitive environment, Alain Krakovitch reveals all that lies behind the cost of rail travel in France. We take a closer look.
For the sake of transparency, we would like to point out that the production of this episode was financed thanks to SNCF Voyageurs (one of our biggest partners). We can't therefore claim total independence, but we've been given carte blanche on the questions and have done our best to remain objective, notably by giving the floor to other players with divergent interests, such as Trenitalia (episode to be discovered on April 20).
The self-financing TGV business model: between no subsidies and high tolls
No direct public subsidies for TGV
Unlike other modes of transport, such as low-cost air travel, the TGV receives no direct subsidies from local authorities or the State. In other words, the full cost of the service - which includes train and infrastructure maintenance - must be financed entirely by ticket sales.
"The TGV is part of the freely organized service, which means that train tickets finance the cost of the train and train investments. Low-cost air travel, on the other hand, is subsidized, whereas the TGV is not at all." - Alain Krakovitch
This imbalance is reflected not only in subsidies, but also in taxes, as Alexis Chailloux already pointed out in the first episode of this series on prices. In France, VAT on train tickets is set at 10%, while the airline sector enjoys two major tax exemptions: no tax on kerosene, and 0% VAT on international flights (10% on domestic flights)! “This asymmetry indirectly favors air travel to the detriment of rail, an ecological and economic nonsense”, he points out.
Rail tolls: a major item of expenditure
A key factor in the high cost of TGV tickets is the high proportion of rail tolls. Alain Krakovitch points out that these tolls are entirely passed on to SNCF Réseau for infrastructure maintenance: "In fact, 40% of the cost of tickets is rail tolls. This toll is used by SNCF Réseau to invest in infrastructure, i.e. rails, catenaries, level crossings."
Tariff equalization: a supportive but costly choice
Alain Krakovitch also emphasizes the principle of fare equalization: the TGV voluntarily serves loss-making routes to ensure a balanced service throughout the country. These unprofitable routes are indirectly financed by the more lucrative lines, generating fare solidarity but also an overall surcharge passed on in tickets. "Half of all TGV services are unprofitable. If we were totally a freely organized service, we wouldn't serve these unprofitable routes. But we consider that, historically, we have a regional development mission", he explains.
Rolling stock: heavy, strategic investments
High maintenance and renewal costs
According to Alain Krakovitch, the costs of rolling stock, particularly TGV trains, are considerable. He refutes the idea that there is a strategy to artificially raise prices by limiting the number of trains available. If trains are withdrawn from service, it's simply because they are technologically obsolete and financially unviable to maintain.
"It's not that we're deliberately scrapping trainsets to drive up prices, it's just nonsense. The trainsets we see today in cemeteries are of a totally different technology to the one we have today, completely at the end of their lives and not salvageable." - Alain Krakovitch
The TGV's technological specificity: performance at a cost
As Alain Krakovitch reminds us, running a train at 320 km/h implies very high safety and performance standards, which necessarily increase manufacturing and maintenance costs. “This performance is expensive, it's not cheap”, he insists.
Innovation through ticket sales
TGV fleet renewal is also a major expense item. Since 2018-2019, a “TGV of the future” project (the TGV M, featured here) has been launched, with the purchase of new trains. But, as Alain Krakovitch explains, “all these investments have to be financed entirely by tickets.” Once again, innovation comes at a price.
© HOURRAIL ! - Zoom sur l'intérieur des futurs TGV M !
Selective competition and social issues: a need for political support?
The social costs of the SNCF model
Although the SNCF's social model is often criticized for its high costs, Alain Krakovitch points to the significant improvement in team performance, which helps keep these costs down. “We work a lot on versatility, and I'm quite admiring of the SNCF teams who have radically changed their way of working,” he stresses.
Competition focused on profitable routes
According to the director of TGV-Intercités, the opening up to competition (Trenitalia, Renfe...) is creating additional pressure on ticket prices, as the new operators concentrate solely on profitable routes, thus reducing the margin available to finance loss-making routes (the famous “fare equalisation” mentioned above).
"Our competitors will position themselves solely on profitable routes. The national balance is threatened because profitable services traditionally finance loss-making services." - Alain Krakovitch
The need for a strong political commitment
In short, the high cost of rail travel in France is the result of a complex combination of economic, technical and competitive factors: no direct public subsidies for the TGV, heavy tolls, costly rolling stock maintenance and renewal, selective competition, social charges...
To make the train more affordable, Alain Krakovitch's analysis emphasizes the need for political intervention, in particular to limit the cost of tolls and relieve the SNCF of some of its investments. In his view, this is the sine qua non for making the TGV a more accessible option for all users, while preserving the regional development mission and a high level of service.
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