VR no longer offers discounted fares through its customer loyalty scheme

Passengers disembarked a train after arriving at Helsinki Central on 16 February, 2016.

VR will no longer offer exclusive discounted fares to the nearly one million members of its customer loyalty programme, Veturi, Maisa Romanainen, the director of passenger services at the state-owned railway company, reveals in an interview with Uusi Suomi.

“Discounts such as the ones we offered last year will end,” she says. “We have all the faith in Veturi, but not as a discount outlet.”

VR announced on Tuesday that it will reduce all of its long-distance fares permanently and overhaul its pricing system. After the announcement, the lowest fare from Helsinki to Tampere was 9.90 euros and the basic fare 21.0 euros on the VR Online Shop.

Members of the customer loyalty programme were offered discounted fares in order to determine how much they are prepared to pay for the services, says Romanainen. The loyalty programme will henceforth be used to provide information about disruptions in rail services and the availability of optional services.

Related posts:

- VR cuts long-distance fares by 25% (16 February, 2016)

- VR to close ticket offices at 13 stations, lay off at least 157 (02 December, 2015)

“Our regular customers have been eligible for discounts on optional services. We offer a lot of partner benefits for a number of events in the summer and ice hockey games in the winter, for example. [The customers] will of course receive information about schedules in advance,” says Romanainen.

She also reveals that the considerable reductions in long-distance train fares announced on Tuesday were the objective of the belt-tightening programme launched in the second half of last year. VR announced in August that it will resort to personnel cuts in order to create annual cost savings of 50 million euros.

“Most of the savings will be used for the pricing,” she says.

VR estimated in November that it will have to make a total of 157 people redundant in the first stage of the belt-tightening programme.

Approximately half of the targeted annual savings will be derived from personnel costs and the other half from real estate and other costs, according to Romanainen. The ticket office closures confirmed at the beginning of this year, for example, account for a notable share of the targeted savings, she adds.

She refrains from disclosing any exact figures.

VR posted an annual operating result of 38 million euros in 2014 on net sales of 443 million euros from its commuter and long-distance services. Romanainen estimates that the ticket revenues are likely to decrease moderately this year as a result of the fare reductions because the cost savings will not be realised fully until next year.

“We're confident of meeting our goal of gaining one million new passengers. The goal has been set based on the data we collected during our widespread campaigns last year,” she tells.

She also assures that all of the market-based services provided by the state-owned railway company are profitable. Roughly 85 per cent of the services it provides are market-based while the remaining 15 per cent are based on its service obligation.

The Ministry of Transport and Communications announced earlier this month that the service obligation will be expanded until 10 December, 2016. The decision will inflict losses of roughly 20 million euros on VR, estimates Romanainen.

Aleksi Teivainen – HT
Photo: Martti Kainulainen – Lehtikuva
Source: Uusi Suomi