Price and revenue management for passenger transport

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As pricing and revenue management Passenger (short PEP ) described the German Railway in 2002 and 2003 has initiated in December 2002 tariff system in the long-distance passenger traffic . The system was revised in summer 2003 after sales and passenger losses.

Instead of distance-related prices with surcharges and numerous offers, there were early booking discounts known as Plan & Spar and a fundamentally changed BahnCard .

philosophy

The price system was based on a so-called normal price , which was formed on the basis of degressive basic prices (in long-distance and local transport). On selected routes have been Relations rates set. For the use of the 1st class, a factor of 1.5 was applied compared to the price of the 2nd class.

The so-formed regular price was as a Plan & Spar designated zuggebundenen Early booking discounted are:

  • The Plan & Spar 10 tariff granted a discount of 10 percent on the normal price and could be purchased with a one-day advance notice. It was valid both for individual journeys and for tickets for outward and return journeys.
  • The Plan & Spar 25 tariff offered a 25 percent discount on the normal price. The preemption period was three days. In addition, the tariff was only valid if a return trip was booked on one ticket.
  • The Plan & Spar 40 tariff granted a 40 percent discount on the normal price. With a pre-sale period of seven days, outward and return journeys had to be booked on one ticket. In addition, there was a weekend commitment .

The exchange of Plan & Spar tickets was possible for a fee.

A passenger discount of 50 percent from a certain minimum price could be applied to both normal and Plan & Spar prices . In addition, the BahnCard has been redesigned (25 percent discount, annual fee of 60 euros in 2nd and 150 euros in 1st class). A service program for frequent drivers was also created.

Children up to the age of 14 traveled free of charge when accompanied by their parents or grandparents. Special target group concepts should be created for families, children / young people, multi-person trips / groups, commuters and corporate customers. For groups, a quota group price system had already been introduced on January 1, 2001, which provided discounts of up to 75 percent.

history

background

The seat booking system (EPA) used by the Deutsche Bundesbahn at the end of the 1980s did not allow for allotment. At that time, a technical solution to supplement the system was being worked on.

Since the beginning of the 1990s, railway employees have been working on a reform of the tariff system under the name Loco . The ICE fare was introduced in 1991 as the first stage of this system . According to the railway company, this enabled the demand to be distributed much more evenly over the days of the week.

Under the leadership of Anna Brunotte , up to 500 employees in Frankfurt developed the new tariff system, which finally came into force on December 15, 2002. The Loco concept was already the basis for the tariffs of the ICE system introduced in 1991. Short, competitive routes were priced relatively higher than longer and less attractive routes. According to a press report, the then long-distance transport director Axel Nawrocki had to resign at the end of the 1990s because he failed to reform the price system.

Work on the redesign of the price system began in early 1999. According to the company, the realignment of the price system was based on a far-reaching empirical basis. Based on this, a market simulation model was developed to assess price policy measures. Various acceptance and market studies have shown a high level of acceptance of the new prices. In particular, the new system achieved a much better price perception. The introduction of the new price system has been postponed several times. In spring 2001, the introduction previously planned for June 1, 2001 was finally planned for the second half of 2002. In the event of further delays, Deutsche Bahn feared a lack of additional revenues amounting to 570 million DM per year.

The company saw three main deficits that should be addressed within the framework of the price system: pricing , insufficient price differentiation (especially in the range between 300 and 500 kilometers travel distance) and a lack of occupancy control. In surveys, pricing and price levels were stated to be the main obstacles to using the railway. Price perception was also in need of improvement; the railway was perceived as an overall expensive means of transport.

According to the company, the railway was "priced out of the market" at long distances. The introduction of various flat-rate special offers (e.g. the good evening ticket ) led to illogical passages in the price system that no customer could understand. Difficulties in mapping the price system using information technology were cited as a further reason. This gave rise to the approach of degressive pricing. For distances between 600 and 800 kilometers, the price has been reduced by 25 percent.

At the same time, peak load tariffs should be introduced. Last but not least, the Have a Nice Weekend Ticket showed how aggressively priced offers would become victims of their own success if trains were overcrowded and thus unsatisfied. The overcrowding of trains was a punctual problem that occurred to varying degrees depending on the time of day, day of the week, type of train, car class and route section. Previous attempts to limit this problem (in addition to a possible capacity adjustment) through time window control (peak pricing) could not be used across the board.

In addition, the segment of multi-person travel has not yet been adequately served by rail - while around 70 percent of long-distance journeys within Germany consisted of at least two travelers, the corresponding share for rail was only around 40 percent. While the modal split of rail for long-distance travel in Germany was 18 percent (cars: 71 percent), the market share for travelers of two to four people was six percent (cars: 83 percent). By bringing rail prices closer to the cost of the car, new potential could be opened up on the market. The introduction of a passenger discount (each passenger paid 50 percent of the price of the first) was largely due to the pressure of competition with cars.

The new price system was one of the 25 measures in the “Focus” package of measures launched in February 2001, with which DB wanted to improve its productivity and customer orientation by 2005.

DB expected a three percent increase in sales through the new system. In addition, the average capacity utilization of long-distance trains was to be increased from 40 to 60 percent. When it was introduced at the end of 2002, the company anticipated an increase in revenues from passenger transport of 350 million euros in 2003. This corresponded to an increase in sales of almost ten percent. The number of passengers should increase even more.

The sale of tickets according to the new price system began at the beginning of November 2002. On November 29, 2002, internet ticket sales according to the new price system began. According to its own information, the company offered 300,000 seats a day at Plan & Spar prices.

introduction

The introduction of the new tariffs was initially planned for mid-2001 and was later postponed to January 1, 2002. At the beginning of 2001, Deutsche Bahn announced, with reference to the high technical effort, that the changeover should take place in the course of 2002. The company described the conversion as the largest information technology project in the history of the railway.

The price system was presented at the end of 2001 and introduced on December 15, 2002 when the timetable changed.

The online ticket forerunner Surf & Rail , which was re-introduced in 2003, is one of the special offers that have been abolished as part of the new price system .

In cooperation with the Association of German Ridesharing Centers, DB offered an online rider exchange.

Before the system was introduced, 22,000 rail and 20,000 travel agency employees had been trained.

Effects

According to its own information, the company has reduced the price level by an average of twelve percent. While the normal prices on long-haul routes have been reduced by up to 25 percent, the prices for shorter routes have been increased slightly in some cases. The price of a single trip from Hamburg to Frankfurt, for example, has been reduced from 98.20 to 80.80 euros. The price differentiation according to train categories (ICE, IC / EC) was retained, pure local transport prices were not affected by the price system.

By December 13, 2002, the company had sold 1.3 million tickets under the new tariffs. In January 2003, DB's sales of long-distance tickets fell by 13.8 percent year-on-year. In the first two months there were income losses of tens of millions of euros. A spokesman named the poor economy , the winter, technical problems on the high-speed route Cologne – Rhine / Main and the competition from low-cost airlines as reasons for the decline in sales . Adjusted for the economy, they are “fully on schedule”. Similar sales declines were seen in February and March. In the first three months of 2003, long-distance passenger numbers fell by seven percent. By June 2003, sales were 20 percent below plan.

In the first half of 2003, sales in DB long-distance passenger transport fell by 13 percent year-on-year. With a turnover of 1.44 billion euros, a loss of 266 million euros was achieved. In the same period of the previous year, long-distance transport had made a profit of 50 million euros.

In August 2003 sales in long-distance passenger transport almost reached the previous year's level again.

criticism

The new price system met with a wide range of criticism. Stiftung Warentest , Pro Bahn , the Verkehrsclub Deutschland and others pointed to various weaknesses in the new system. In December 2002, Stiftung Warentest welcomed the logical possibility of combining discounts, but criticized numerous other aspects: in addition to the reallocation of the Interregio and the halving of the BahnCard discount, the exchange fee of up to 45 euros was described as the “peak of customer distance”. In addition, the former family savings price was often cheaper than the new savings price for families .

Shortly before the new system was introduced, Brunotte said that most of the concerns about the new system were based on either “real prejudice or false information”. Passenger transport board member Franz said internally that the system was "a necessary educational process".

TV journalists who wanted to report on the new pricing system at train stations on December 15, 2002 criticized shooting bans. Of around 60 registered television teams, only two received a filming permit that day.

At the end of December 2002, the DB threatened Pro-Bahn chairman Karl-Peter Naumann and another functionary of the association with a lawsuit if they did not issue a declaration of discontinuance within a few days to repeat two statements. The subject of the dispute were statements that every second customer was paying too much for lack of in-depth advice. Furthermore, buying the cheapest card is a matter of luck. Railway boss Mehdorn said that Deutsche Bahn would not change the price system, even if this would drive "certain high profile officials to white heat". Deutsche Bahn ceased contact with Pro Bahn . At the turn of the year, the association submitted a 30-page documentation with problems that would arise when booking the cheapest connection.

In mid-January 2003, the Hamburg Regional Court issued an injunction that forbade Naumann to claim that every second rail customer was paying too much for his ticket when he was threatened with a fine of € 250,000. Naumann called the next higher instance; the trial was due to begin in August 2003. In March 2003, Stiftung Warentest presented the result of a study of 120 test conversations at the counter and by telephone. Accordingly, the cheapest fare was mentioned only in every second case. "The price system and its technical implementation are proving to be too complicated and confusing," said the auditors. In addition, a number of technical errors were criticized.

corrections

On May 20, 2003, after a board meeting on that day, Deutsche Bahn announced changes to the pricing system. With effect from the following day, the cancellation fee for the Plan & Spar prices was reduced from 45 to 15 euros. A first review and possible improvements were announced for December of the same year. Also on May 20, 2003, the railway directors Christoph Franz (passenger transport) and Hans-Gustav Koch (marketing) were released from their duties. When the 2002 annual balance sheet was presented on March 21, 2003, the new price system and corrections to it were the dominant issue. Railway chief Mehdorn emphasized that the new system was by no means bad overall, and that the criticism had been raised.

On July 2, 2003, Deutsche Bahn announced various changes to the tariff system: On August 1, the 50 percent BahnCard was reintroduced as BahnCard 50 and the three Plan & Spar discount levels (10, 25 and 40 percent) in two as a saver price designated discount levels of 25 and 50 percent changed. Both saver fares were available up to three days before the start of the journey and were allotted. For the saver price 50 there was also a weekend commitment (one night on Saturday to Sunday between the outward and return journey or outward or return journey on Saturday or Sunday). The normal prices remained unchanged. According to the railway, the level of normal prices corresponded roughly to the tariff level of 1994.

As of April 1, 2004, long-distance transport prices were increased by an average of 3.4 percent; Season tickets were 1.9 percent more expensive on average. The normal prices up to 100 km have been kept stable, the prices in the distance range from 100 to 200 km have even been reduced by an average of 1.6%. In the range between 200 and 700 km, however, prices were increased by an average of 5.8%. On the same date, a maximum price (111 euros in 2nd class, 167 euros in 1st class) was introduced.

With the timetable change on December 12, 2004, fares were raised again; according to company information in the 2nd class by an average of 3.1 percent. The company justified this step with increased costs and a high proportion of travelers who used discounted tickets. At the same time, the combination of passenger discount and normal price was abandoned; this option was maintained for Bahncard holders until mid-December 2005. The 1st class factor (as a surcharge on the 2nd class fare) has been increased from 0.50 to 0.55. As of December 11, 2005, the long-distance fares of the DB were increased by an average of 2.9 percent (2nd class) and 4.2 percent (1st class).

literature

  • Gerd Wilger, Andreas Krämer: With attractive prices for additional traffic - the new price system and revenue management of Deutsche Bahn AG. In: ZEVrail . Vol. 126, 2002, issue 6/7, pp. 284–289.
  • Rudolf Breimeier: DB's new price system - a wrong concept. In: Eisenbahn-Revue International . Issue 6/2003, p. 277.

See also

Individual evidence

  1. ↑ a b c d e f g h i Gerd Wilger, Andreas Krämer: The new price system and revenue management of Deutsche Bahn. In: Your train. ISSN  0172-4479 , issue 4/2000, pp. 208-213.
  2. ↑ Dietmar Kampovsky, Franz Radke: Seat reservation on expansion course. In: The Federal Railroad . 64, No. 10, 1988, pp. 925-928.
  3. ↑ a b In profile: Anne Brunotte. Inventor of the controversial new rail tariffs. In: Süddeutsche Zeitung . No. 287, 2002, p. 4.
  4. ↑ One year of high-speed traffic . In: Die Bahn informs . No. 4 , 1992, ZDB -ID 2003143-9 , p. 4-6 .
  5. ^ Daniel Kastner, Richard Rother: Discount or Rabatz . In: The daily newspaper . March 14, 2015, p. 18-20 ( taz.de ).
  6. ^ Eberhard Jänsch: Ten years of high-speed traffic in Germany. In: Eisenbahntechnische Rundschau , issue 6/2001, pp. 311–322.
  7. ↑ Christian Siedenbiedel: The everyday drama at the ticket counter . In: Frankfurter Allgemeine Zeitung . No. 246 , 1999, pp. 73 .
  8. ↑ Klaus Ott: Bahn threatens fiasco with ticket sales . In: Süddeutsche Zeitung . April 5, 2001, p. 23 .
  9. ↑ a b c d Nobody understood the old system any more. In: Süddeutsche Zeitung . No. 194, 2002, p. 18.
  10. ↑ Railway budget. In: Eisenbahn-Revue International . Issue 4/2001, p. 146.
  11. ↑ Flying as a role model. In: Süddeutsche Zeitung . No. 234, 2002, p. 2.
  12. ^ A b c Klaus Ott : With "Pep" into a new time. In: Süddeutsche Zeitung . No. 289, 2002, p. 1.
  13. ↑ Print tickets yourself. In: Süddeutsche Zeitung . No. 277, 2002, p. 12.
  14. ↑ Like a snowman in the rain . In: Der Spiegel , issue 14/2003, March 31, 2003
  15. ^ Announcement of the new tariff system later. In: Eisenbahn-Revue International . Issue 3/2001, p. 98.
  16. ↑ Severin Dünnbier: Considerations on the new fare concept of Deutsche Bahn. In: Eisenbahn-Revue International . Issue 12/2001, p. 562.
  17. ↑ a b And the train is coming…. In: Süddeutsche Zeitung . No. 288, 2002, p. 17.
  18. ↑ Message "Surf & Rail" is back. In: Eisenbahn-Revue International . Issue 11/2003, p. 476.
  19. ↑ Message passenger wanted. In: Eisenbahn-Revue International . Issue 2/2003, p. 50.
  20. ↑ Rail travelers now have good tickets. In: mobile . August 2003, p. 46 f.
  21. ↑ New DB AG price system comes into force. In: Eisenbahn-Revue International . Issue 12/2002, p. 548.
  22. ↑ a b Bahn plans special campaign. In: Süddeutsche Zeitung . No. 74, 2003, p. 21.
  23. ↑ Klaus Ott : Fewer passengers on the train. In: Süddeutsche Zeitung . No. 50, 2003, p. 20.
  24. ↑ a b Bahn with significantly higher quarterly loss. In: Süddeutsche Zeitung . No. 117, 2003, p. 19.
  25. ↑ Topic of the day. In: Süddeutsche Zeitung . No. 149, 2003, p. 17.
  26. ↑ Deutsche Bahn is losing massively customers. In: Süddeutsche Zeitung . No. 192, 2003, p. 22.
  27. ↑ Report DB half-year figures. In: Eisenbahn-Revue International . Issue 10/2003, p. 426.
  28. ↑ New accents at DB AG. In: Eisenbahn-Revue International . Issue 11/2003, pp. 515-517.
  29. ^ Criticism of new rail tariffs. In: Süddeutsche Zeitung . No. 285, 2002, p. 18.
  30. ↑ Stiftung Warentest: Many drive worse. In: Test . Issue 12, 2002, pp. 78-81
  31. ↑ Bahn separates from tariff system manager. In: Süddeutsche Zeitung . No. 118, 2003, p. 23.
  32. ↑ Throw away the tickets, we'll drive the car. In: Süddeutsche Zeitung . No. 119, 2003, p. 28.
  33. ^ Bahn takes legal action against critics. In: Süddeutsche Zeitung . No. 299, 2002, p. 2.
  34. ↑ Message when two people argue. In: Eisenbahn-Revue International . Issue 2/2003, p. 50.
  35. ↑ Pro Bahn does not fear getting under the wheels. In: Süddeutsche Zeitung . No. 2, 2003, p. 6.
  36. ↑ Bahn prohibits criticism. In: Süddeutsche Zeitung . No. 11, 2003, p. 20.
  37. ↑ Klaus Ott : Long-distance trains cloud the track record. In: Süddeutsche Zeitung . No. 152, 2003, p. 23.
  38. ↑ Note four for new rail prices. In: Süddeutsche Zeitung . No. 73, 2003, p. 19.
  39. ^ Stiftung Warentest : Test customer advice from Deutsche Bahn. In: test. 04/2003.
  40. ↑ Wolfgang Hanke: On the sound of Schmalmeien incorrectly calculated in Plan and Spar. In: Eisenbahn-Revue International . Issue 7/2003, p. 298 f.
  41. ↑ Ulf Brychy, Klaus Ott : Bahn corrects the controversial price system. In: Süddeutsche Zeitung . No. 116, 2003, p. 1.
  42. ↑ Bahn corrects prices and discounts. In: Süddeutsche Zeitung . No. 150, 2003, p. 1.
  43. ↑ News about the "new" price system: return to the tried and tested. In: Eisenbahn-Revue International . Issue 8–9 / 2003, p. 338.
  44. ↑ a b message Again, price changes at DB AG. In: Eisenbahn-Revue International . Issue 3/2004, p. 98.
  45. ↑ Notification Rail travel is becoming more expensive again. In: Eisenbahn-Revue International . Issue 11/2004, p. 491.
  46. ↑ Message rail travel is becoming more expensive. In: Eisenbahn-Revue International . Issue 10/2005, p. 450.