Opportunity cost

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Question 10
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The European Night Train Market

The European night train sector has seen a significant resurgence in recent years, driven by environmental concerns and a preference for low-carbon travel. Trans-Europa Sleeper (TES) is one of the emerging private operators managing overnight long-distance routes across the continent. It faces competition from national operators such as ÖBB Nightjet, newer entrants like European Sleeper, and budget airlines.

2021/222022/232023/24
Trans-Europa Sleeper (TES)120340510
ÖBB Nightjet1,1001,8002,400
European Sleeper45115190
SNCF Intercités de Nuit350520680

Table 1 – European Night Train Passenger Journeys (thousands)

To balance operational costs with high load factors, overnight train operators rely on yield management systems and dynamic pricing structures, where fare rates rise as the departure date approaches.

RouteDate when price was quotedDate of travel
15 June 202420 August 202412 October 2024
Berlin to Paris10 January 2024€95€75€60
1 May 2024€210€135€90
Brussels to Prague10 January 2024€80€65€50
1 May 2024€165€105€75

Table 2 – Standard Couchette ticket prices quoted on different dates

Many operators also offer passengers standard cabins or premium private upgrades with additional benefits such as meal plans and station lounge access.

OperatorBase CabinPrivate CompartmentGourmet Meal Plan & Lounge
TES€135Free€55
ÖBB Nightjet€160Free€65
European Sleeper€115€25€40

Table 3 – Cabin configurations and add-ons for Berlin to Paris (to travel on 20 August 2024)

Using Table 2, explain the concept of opportunity cost.

[2]

Opportunity cost Questions

  1. A Level
  2. /Economics
  3. /Opportunity cost