Train fares used to be almost as standard as train schedules, with predictable discounts for booking a month or a week in advance or on a weekday.Lately train fares look a whole lot different, with VIA Rail offering $127 last-minute retu...
Train fares used to be almost as standard as train schedules, with predictable discounts for booking a month or a week in advance or on a weekday.Lately train fares look a whole lot different, with VIA Rail offering $127 last-minute return fares between Montreal and Toronto, taxes in.That’s cheaper than half-price fares on Porter Airlines, which sometimes runs $200 return fares, taxes included, between the two cities.The cheapest VIA fare between Montreal and Ottawa is $29 one way, $33.34 with taxes.That’s because VIA has ripped a page from the airline handbook when it comes to setting fares. Now they’re handled like airline ticket sales – some tickets go high, some tickets go low, depending on the month, the day, even the hour of travel.“We decided we wanted to develop a revenue-management team and follow the airline model. We put a team together of people experienced in that area, some from the airline industry,” said Steve Del Bosco, chief marketing and sales officer for VIA Rail Canada.He said customers have accepted the change well.“The airline style of pricing is I think, pretty much understood in the public and it’s expected.”The system is called revenue management, and hotels, car rental agencies and airlines have been using it for years.It means doing everything to get as many people on a trip as possible, at the highest fare the market will bear in each fare category.Revenue management computer software optimizes pricing itineraries every day, crunching historical booking data and current market conditions to respond quickly to shifts in market conditions and maximize returns.The system was implemented at VIA last June, helping drive an increase in ridership of 10.4 per cent in the Montreal-Ottawa-Toronto triangle in the last quarter of 2012, compared to a year earlier, according to the Crown Corporation’s annual report.“It helps us push people to trains where we know we have room, and have people pay more for trains we know are in high demand,” said Del Bosco.The new system allowed VIA to eliminate advance purchase requirements for discount fares and launch a new economy fare to attract more customers who may have otherwise have travelled by car.The railway has also benefitted from making schedule adjustments across networks, reducing the number of trains in markets where ridership was low, and reallocating resources to markets where demand is high and growing.It’s added free Wi-Fi for all passengers and simplified Web booking. It’s ramped up its social media campaign – offering free cross-Canada tours to people who Tweet about the contest.The revenue management system has also helped boost ridership and revenues on some of the more expensive routes, popular with Canadian and foreign tourists.The new system allows VIA to offer promotions of 50 per cent off, and occasionally, 75 per cent off.“We manage the inventory so we don’t discount every single seat. Last time we looked, 20 per cent were sold at a discount. Our average fares have been maintained very well,” said Lynn Lefebvre, product manager for VIA long-haul services.In 2012, 112,000 passengers took The Canadian, compared to 109,000 in 2011; and 106,000 in 2010.Competition through the Rockies comes from the privately owned Rocky Mountaineer train travel service, which runs rail tour packages in Western Canada that start at $900 per person for two days.“My feeling is that any way that VIA can increase ridership and maximize revenue is great, so I’m open to flexible fares,” said Jason Shron, president of Rapido Trains Inc., Canada’s largest model train company and a board member of the Toronto Railway Historical Association.Shron often travels by train with his family.“I want them to succeed. Under 800 kilometres, it’s the most environmentally sound way of transporting large groups of people.
