Spain’s state-owned rail company Renfe is to launch a new line for its low-cost, high-speed AVLO service. The route will operate between the cities of Madrid and Valencia, which are already served by Renfe’s existing high-speed AVE and intercity trains. Tickets will start from €7 one way, which is significantly less expensive than the current AVE to Valencia.
This so-called flat rate will only be available to passengers who book well in advance and for trains operating in off-peak hours, i.e. when it is less busy. For the rest of the services, there will be a basic rate that will vary depending on demand. Passengers will also be charged additional costs for services such as baggage (from €10), seat selection (€8) and being able to change their ticket up to 30 minutes before the departure time (€8). There will be reduced prices for children, who can travel with tickets starting from €5, while large families will receive a discount between 20% and 50%.
The prices could be higher or lower, depending on the departure time of the train, the day of the week, the occupancy rate of the trains and how much in advance the purchase was madeRenfe sources
This pricing system is very similar to the one used on AVLO’s Madrid-Barcelona line, which was the first low-cost service to be launched by Renfe. According to sources from the rail operator, this initiative has been very successful, with occupancy rates above 90%.
With the Madrid-Valencia line in March, Renfe hopes to achieve two goals: to compete against the low-cost high-speed rail service Ouigo, from the French company SNCF, which will launch its own service between these cities in the spring, and to challenge private vehicles as the main form of transportation for this route. While most people travel between Madrid and Barcelona by train, this is not the case for trips between Madrid and Valencia, with the short duration making it attractive for car users.
The announcement of the AVLO pricing plan for the new Madrid-Valencia line comes amid growing criticism of Renfe’s recent rate changes. In June, the rail company introduced a new pricing strategy that eliminated economy and preferential classes, as well as its discount offers. Under the new system, the highest price is equivalent to what was previously known as the “Flexible Rate,” which was the most expensive. This price is used as a reference point to define up to 16 different classes, which are regulated by Revenue Management, a system that sets market prices used by the aviation and hotel sectors.
“Revenue sets the rules of business under which prices could be higher or lower, depending, for example, on the departure time of the train, the day of the week, the occupancy rate of the trains and how much in advance the purchase was made,” explained sources from Renfe.
Despite this, there have been many complaints about the small number of discounted seats available, the high prices over summer vacations, weekends and long holidays and the fact that services such as seat selection now have to be paid separately, when before they were included in the cost of the ticket.