France’s TGV (train à grande vitesse, or high-speed train) celebrates 30 successful years in September. A source of national pride, standing alongside commercial and technological showpieces such as Concorde, Airbus and Ariane, it is the fastest train in the world – capable of 575km/hr – and its services crisscross the country at 300km/hr. Under the auspices of the SNCF (French National Railways Company), since 1981 it has moved 1.7 billion people sans a mortal accident. More than 80% of the French ride it regularly. And as the cash cow of the 80s, it unseated the aeroplane as the transportation of choice between French cities.

At the heart of this triumph lies a unique business model. Other high-speed lines – Spain’s RENFE, Deutsche Bahn, Trenitalia, even Thalys and Eurostar, subsidies of the SNCF – move business people in comfort, and their tickets don’t come cheap. But the TGV is the people’s train. It serves not only the business community, but students and families, thanks to yield-management tactics that let it slash prices, often when demand is high. While its adversaries run exclusively on high-speed tracks, the French version can function on conventional lines as well. Eurostar and Thalys operate about 20 trains. A few dozen circulate in Italy, Spain and Germany. France boasts 500.

But spring could be over for the TGV. It is not on track to match its dazzling debut phase. Plagued by problems, it’s no wonder that, approaching this coming-of-age milestone, the SNCF is fêting and fretting at the same time. Its TGV is a hostage to money, or the lack of it – big time.

For starters, its celebrated business model has begun to flag. Barbara Dalibard, director general of SNCF Voyages, recently revealed that 30% of TGV lines are not making money. Partially at fault are exorbitant rental charges – what the SNCF calls tolls – that it must pay the RFF (French National Rail Network), the managers of the system, to run trains on its tracks, much as telephone operators lease government- owned cables or airlines pay for airport slots. These tolls rose 6.5% in 2009, 11% in 2010 and 11.7% this year, when the SNCF will pay €200m above last year’s €1.5bn. These are not token user fees, and the two state institutions – the sector’s top players – are practically at war over them.

It’s a critical matter for the SNCF, which is trying to keep them from affecting prices. According to the European Commission, the TGV is 30% cheaper than its German or UK counterparts, and the French state operator has vowed that the TGV will remain within reach of the average French person. For the SNCF’s executive director for European markets and development, Frank Bernard, this has created a vicious circle. “As the tolls keep rising, our profits keep dropping, due to the volume of traffic we operate. We can’t remain indifferent to this, and just watch our lines go into the red,” he says. “Our instinct is to cut back on service.” But this would likely ignite riots in the regions, and be calamitous for the economy, even if the government were to permit it.

The obvious option is to raise prices. But this would terminate the democratic business model. “That’s another vicious circle,” laments Bernard. “We can’t, and don’t desire to pass on increased toll fees. This would make the TGV a train for the rich; there would be fewer customers – an elite – which is something we absolutely do not want.” What the company wants instead is to continue functioning within a strategy of volume, with trains for the greatest number, and remain the purveyor of high-speed transport for all the French.

What solution remains? “If we don’t raise prices there really isn’t one,” says Bernard. “The tolls rise significantly every year.

This vicious circle is leading the French rail system into an economic dead end.”

The possible demise of the original- format TGV for everyone, once so beloved by the French, is understandably darkening the mood at the SNCF as the birthday nears.

The operator also needs to replace its first-generation trains, now approaching their end of life. It also has tomorrow’s TGVs to think about. Customers want next- generation trains to go faster, carry more people, consume less energy, make less noise, and last 30-40 years in the bargain.

The government has poured €11bn into the TGV system since 1997, but these are no longer flush times for state budgets. Underfunding remains the scourge that has beset the popular train.

The situation could even have an impact outside of France. The government has launched at least a dozen new projects across France, to the tune of €50bn; 2,000 kilometres are supposed to be added by 2020, extending the TGV to farther corners and completing the network. But no one has yet said whether they will be paid for by the state, the regions, customers or a combination of the above. Cynics suggest that by 2014, some of these proposals will be dead. If that happens, the dream of a Europe fully linked by high-speed trains goes too.

If that weren’t enough, the SNCF is seeking additional capital to finance a crucial strategic change: for three decades, its policy has been “all-TGV”, to the detriment of local rails, intercity trains and trams. The operator considers this its core profession and wants to upgrade the neglected sector as well, reinstituting a more balanced business plan.

Other conflicts compound the TGV crisis. On the customer side, delays, labour strife and rising public dissatisfaction are all beginning to undermine morale and accentuate the malaise. Consider these Facebook postings: “Taking the TGV has become a luxury,” grumbles one; “Only for rich people or SNCF personnel who ride for free,” says another. And: “A Paris-Geneva ticket cost €240 return. I took Air France for €90. Now I’ve seen everything: the train that’s more expensive than the plane!”

The SNCF admits that the TGV’s image is “complicated” and is working hard to simplify customer relations. It envisions a new ‘i-TGV’. E-tickets are already a new feature, and innovative services centred around the internet, email, digital radio and TV are planned to make it more “connected”. As Bernard notes: “Customers want to keep living their professional and private lives while on the move. It’s our job to facilitate the ongoing connection with their world.” The company is certainly thinking about its clients at the moment– but if it doesn’t find a cash fix, there won’t be any, because there won’t be any trains.

Looking outside the country seems to offer some hope. The high-speed market, once very French, now blooms with opportunities on all continents. Alstom, which builds the trains, forms with SNCF the tandem that the two call “La Maison France”.

This alliance made the first TGV a hit at home. Abroad is now where the House of France hopes to tap into fresh motherlodes to subsidise its rebirth, and prospects are big indeed. Globally, the high-speed network is expected to double by 2030, with 35,000km predicted – a third of these in China. Brazil, Turkey, Russia, Morocco and Saudi Arabia all have projects in various states of realisation, and Algeria, Argentina, Egypt and Mexico will follow. Exporting their winning formula could provide Maison France with bankability that would eventually outshine the original version of the TGV. Alstom must battle Japanese, Korean, German, Canadian and Chinese competition for these projects, but it boasts a number of distinct advantages.

With the SNCF, it can claim 30 years’ experience in the high-speed trade, compared with Korea’s seven years and China’s three. Since 1981, it has delivered 650 TGVs to operators worldwide; 540 for France and 111 abroad. Maison France runs a double-decker train every four minutes between Paris and Lyon during peak hours; that’s 1,000 people at 300km/hr, every 240 seconds. “The same density as an underground line,” notes the outgoing president of Alstom Transport, Philippe Mellier. “The Chinese can make high-speed trains, but they run every 20 or 30 minutes. That’s not the same thing.”

The value-added that the SNCF offers lies in its ability to de-risk new projects. “It’s easy to make mistakes early on,” says Bernard. “You can badly position the infrastructure, the stations or the workshops where you do repairs. You can under- or overestimate demand.

We’ve been part of 60 projects. We know how to operate these lines, but we also know to avoid the errors.” The SNCF calls this “early operator involvement”.

Such savoir faire, or selling points, made the €400m bid to build 14 trains for Morocco a winner. In Russia, Maison France put St Petersburg-Helsinki trains in service, and awaits word on a Moscow-St Petersburg extension. When the Saudi offer was made public, observers said China was a shoo-in and would kill off Western competition. The end of the European model was forecast. Yet Chinese technology was not adapted to the desert and high heat; it was no match for the House of France, which with Spain is one of the two finalists. Maison France will compete for a lucrative project in California, although a Florida proposal, for which it had drafted plans with the UK’s Virgin and civil engineers Vinci, was recently scrapped by the state’s governor. Brazil has yet to make up its mind on a Rio-São Paolo route.

Like the cultures of the host nations, these ventures and their financial configurations all differ, but Alstom is optimistic. It is accustomed to working abroad these days, as less than 20% of its €5.5bn revenue is earned in France. Lack of available investment resources back home drove it to develop new markets, particularly in Asia. Six years of heavy investing in labour, R&D and technology, and with its partners like the SNCF, is starting to pay off. Mellier credits his company’s overseas performance to the decades- old marriage with its number-one French associate. “Anyone can say they can build a train that runs fast,” he explains. “But this train has to be easily marketable, cheap, and not consume much energy. That’s the experience Alstom has with the SNCF, and it’s unique in the world.”

There’s another reason the House of France might want to look abroad. In Europe, international rail traffic opened to competition in December 2009. Trains from Germany, Italy, Belgium or the UK can now operate in France, where such opposition is on the rise. Tomorrow will almost certainly see two, if not more, players managing the high-volume Paris-London or Paris- Amsterdam lines. There are projects for Lyon-Turin and additional Paris-Brussels services. Low-cost airlines eat away on another front. The SNCF’s revenue from rail freight – open to competition since 2006 – plunged by half over the past decade, a clear warning. Will rival passenger lines spell the coup de grâce for the TGV at home?

Instead of counting out money to succour the famous train, the French government seems to be counting on an open market to cure its national operator’s financial ills – as if hoping that the SNCF unaided finds inspiration from non-native business models that make more economic sense.

While it waits for the divine affl atus to reveal itself, the beleaguered rail group pursues birthday revelry. A special TGV “Tour de France” is visiting French regions from April to Bastille Day as a run-up to the September anniversary. The event draws crowds, because a sunny image of the TGV still lingers in the public mind. But this could be mere nostalgia for what was one of the finest inventions of the past half-century. The TGV business isn’t young anymore. As its first flush of youth fades, the public could be seduced by younger models.