1. A New Report this month by Silverrail, a technology company that specialises in providing rail booking and distribution solutions, highlights the huge potential of introducing competition on more European long-distance routes that currently have only one operator.
2. According to its findings, this could trigger an estimated average modal shift of 50% from planes to trains, resulting in €1 billion in additional revenue for the rail sector and a reduction in CO2 emissions of over 2.4 million tonnes.
3. These findings underscore the importance of faster market opening in long-distance passenger rail. By doing so, European policymakers and Member States can achieve the ambitious climate change goals that were outlined in the EU Green Deal for both 2030 and 2050, all while incurring minimal costs.
4. However, it is unfortunate that many Member States appear to be influenced by lobbying efforts aimed at maintaining the Status Quo. These outdated approaches favour cross-border collaboration between state-owned incumbent rail operators, and an excessive reliance on taxpayer-funded Public Service Obligations. A different approach is now needed.
The Report emphasises the many successful cases where competition has brought about notable modal shift to Rail. For instance, after competition was introduced on the Madrid-Barcelona high-speed rail (HSR) route over the past two years, the modal share of passenger rail soared from 48% to 73%.
Similarly, the London-Edinburgh rail route also witnessed a significant rise modal share, jumping from 35% to 63%, after independent rail operator Lumo started competing with incumbent LNER in late 2021. Now, Lumo is even doubling the length of its trains – so we can expect even more.
What can EU Member States learn from these examples?
That they should instruct their state-owned rail incumbents to compete with each other, just like what has already happened in Spain over the past two years (Renfe vs SNCF vs Trenitalia) and on specific cross-border routes (Italy-France and Spain-France).
“The evidence is compelling: competition grows the rail sector. If EU Member States wish for 50% modal shift to Rail, then they should compel their state incumbent operators to compete with each other. After all, these kinds of operators have all the assets already in place (i.e. rolling stock, financing, sales channels, maintenance facilities and more) in order to make this happen fast. We could see the passenger growth within just a short period.
ALLRAIL President Dr Erich Forster
By contrast, incumbent cross-border cartels clearly do not work – evidence shows that it is time for a change in approach”.
* Attribution: SavageKieran, CC BY-SA 4.0 https://creativecommons.org/licenses/by-sa/4.0, via Wikimedia Commons
** Attribution: MrBoyt, CC BY-SA 4.0 https://creativecommons.org/licenses/by-sa/4.0, via Wikimedia Commons
Both images were cropped for aesthetic purposes.