It was always going to happen. As it had announced in 2022, SNCF, the French national rail operator, increased train ticket prices on January 10 2023. Seats on TGV and Intercités services would rise by 5 percent, in part due to the crisis over energy costs. But the increase hasn’t affected all services. In fact, it will largely impact the highest fares, the ones that those who book at the last minute have to pay due to yield management. Also affected are the ‘Business Première’ tickets as well as the ‘Liberté’, ‘Max Actif’, ‘Max Actif +’ cards.
By contrast, SNCF has opted to ringfence the minimum fares that are, logically, those that are available when ticket sales open. What’s more, as Alain Krakovitch, the director of TGV Intercités pointed out in an article for the French newspaper Le Parisien, the Ouigo ticket prices have also been frozen. Prices and advantages that come with the Avantage, Max Jeune and Max Senior also remain unchanged. Part of the reason for this is the express intention of the French government to limit fares for the less well-off. Which is very much what you’d expect in a country that aims to double the number of railways taken during the 2030s – despite fast-ageing infrastructure.
Like all businesses, SNCF Voyageurs has been affected by the energy crisis. But when you’re the greatest consumer of industrial electricity in the country, the smallest increase can have devastating effects. By using up 7 terawatt hours a year, the railway giant consumes between 1 and 2 percent of French electricity and around 10 percent of industrial electricity. Most of that is used to allow the thousands of daily SNCF trains to keep running, with a lesser amount used to power stations up and down the country.
Clearly, with so much energy being consumed, it can’t be purchased day to day. In 2022, 95 percent was sold at regulated prices. However the 5 remaining percent are subject to spot pricing, which caused the overall SNCF bill to rise to 600 million euros. As its president, Jean-Pierre Farandou, explained in front of an official commission, that’s double the budget forecast for the year in question. “At current pricing, we’re facing extra costs amounting to between 1.6 and 1.7 billion euros”, he said of 2023, during which certain contracts are set to expire. It’s difficult, when faced with such astronomical sums, not to resort to drastic measures. “We’re facing extra charges of 13 percent in 2023, and we’re having to stump up more than half of it ourselves. We could decide to cut back our services or give up some investments, but we didn’t want to. We want to continue to expand our offering, all while offering attractive prices, explained Christophe Fanichet, the CEO of SNCF Voyageurs, at the end of last year.
As for the freight sector, the situation could also become problematic. Although things were looking up in 2021 after the catastrophe of the Covid-19 pandemic, today the industry thinks its very survival is at stake. With SNCF Réseau selling a megawatt hour for ten times the 2021 price, freight operators fear they could be really hurt by the soaring costs – especially the smaller ones. It’s no surprise that many have asked the government for help. Since the end of 2022, they’ve made two very clear requests: a price cap of 180 euros per megawatt hour, and for all of the tolls SNCF Réseau charges them to be taken on by the state. As French newspaper Les Echos points out, a similar measure was already introduced back in 2020, with 50 percent of those tolls already refunded. It remains to be seen if the government will respond to this call for help or if it will continue (as Alliance 4F, a group of businesses in the sector, claims it does) to consider the freight as simply an adjustment variable. In the latter case, this sustainable mode of transport may continue to lose its market share to lorries, which, it doesn’t need pointing out, are much worse for the planet.