Why Renfe's “low cost” AVE can offer tickets at 30 euros


As in the case of aviation, the low-cost railway minimizes expenses and uses trains more intensively

Renfe has presented today in its workshops in its Villaseca de la Sagra its new low cost service, called AVLO. Like any service of this type worth its salt, its differential point to compete with conventional high speed will be its low prices. Although tickets for the AVLO can be purchased from next January, their prices remain unknown, although there are clues as to where they will go. From Renfe they drive a fork that would mean cut them up to 40% compared to the average prices of the conventional AVE. Such a cut would leave the cost per trip in the environment of 20 euros. The same week that Renfe's competitors announced at high speed, the Minister of Education and government spokesperson, Isabel Celaá, said that Executive calculations suggest that the liberalization of the sector will allow ticket prices on routes such as Madrid-Barcelona to range between 25 and 30 euros, which would mean a reduction of around 70% in relation to the current ticket costs. In Italy, a market open to competition for years, the average price of tickets has been cut by 30%.

As in the case of aviation, low-cost rail services can afford to offer much lower prices by minimizing expenses through the suppression of services and the more intensive use of trains. For the first, the AVLO, for example, will only have a tourist class and will do without the cafeteria, which will be replaced by vending machines. In France, the state operator SNCF, which operates the “low cost” Ouigo school, has suppressed all on-board services to further reduce costs.

To increase their capacity, trains are configured differently. The Talgo S-112 of Renfe, for example, will have 20% more seats than normal AVE, to add 438 seats. SNCF has opted for another strategy and operates its “low cost” service with double-decker Alstom trains. Thus, an Ouigo train in a single unit can carry 634 passengers, against the 510 of a conventional train. To achieve greater performance of the rolling stock, the trains remain more hours in operation. Ouigo, for example, has increased from 7 to 13 the hours it has them in circulation.

At the cost of simplifying services, costs are reduced and can be transferred to the final price paid by the customer. SNCF, for example, ensures that 60% of those who use their “low cost” service pay less than 25 euros per ticket.

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