Europe headline right E
uropean passenger rail is an industry of paradoxes. The sector is seeing a steady growth in passenger numbers, coupled
with a tradition of strong advancements in terms of technological innovations. However, fragmentation continues to pose a problem, particularly for rail journeys over national borders. Incumbent rail operators often have firm holds over their respective markets and the numbers suggest their focus is for the most part domestic. Domestic rail travel accounts for 96 per cent of overall passenger kilometers in Europe, and accounts for 99 per cent of overall passenger rail volume. It’s clear that railways are not fully
prepared to profit from the market opportunities that exist today, and there needs to be a real push for cooperation and integration between rail operators to open up the market for travellers who are increasingly requesting cross-border travel.
Six key trends
A new report by Amadeus, The Rail Journey to 2020, identifies six key trends that are considered critical to shaping the future of the European rail industry. Some of the them apply specifically to passenger rail, while others are more general, providing a strong business case for greater levels of intermodal cooperation.
The trends are: i) Liberalisation
Since 2001, the European Union has driven progressive liberalisation of the European market for rail, in line with its vision to create a single European market. This is progressing on a stage-by-stage basis: the third package, adopted in October 2007, introduced open access rights for cross- border rail passenger services and was implemented in 2010. Details of the most recent and fourth package were published in early 2013. Liberalisation is expected to eventually
bring more operators into Europe’s rail markets, offering more choice to rail
passengers. However, as the Amadeus report notes, early trends indicate that this is fragmenting services on some long- distance routes, because operators regard other players on the route as competitors.
ii) New market entrants Structural separation, along with the EU’s wider drive to spur competition on domestic and cross-border rail, will potentially pave the way for new market entrants. This newer, more ‘open’ market could alter the way in which the more dominant operators have traditionally operated in their home markets. However, competition is expected to be driven mainly by incumbent passenger rail operators expanding their operations abroad, rather than entirely new companies starting from scratch.
iii) Completion of new high-speed lines High-speed rail will remain a key focus for the rail industry. There has been a notable expansion in high-speed routes in recent years, particularly within the Italian and Spanish regions. An additional 5,000 kilometres of new high-speed lines are to be laid by 2020, and the report explains how the continued expansion of the high- speed network will allow rail companies to leverage the time advantage it offers for competitive differentiation. New high-speed lines could significantly spur cross-border passenger volumes.
iv) New hubs The EU has suggested that enhanced multimodality is the key to unlocking Europe’s congested transport network. Through its TEN-T programme (Trans-
April 2013 Page 163
Towards 2020 - A clear view of European rail travel
The next seven years will be crucial for the European rail industry says Thomas Drexler. Liberalisation, increased competition and greater passenger expectations mean companies need a clear view of the opportunities and challenges that lie ahead
European Transport Network), it aims to support the introduction of multimodal hubs at 37 key airports by 2030. Today, only 14 airports are connected to long distance or high-speed rail services, so this is a clear area for growth.
v) Air-rail and rail-rail cooperation Greater levels of cooperation – both air- rail and rail-rail – are touted as essential to delivering the kind of seamless passenger experiences that will drive up passenger volumes. Already, where multimodal hubs are present, passenger rail providers and air carriers are developing corporative relationships. Cooperation can take the form of commercial agreements (where airlines sell a unique ticket for a trip which includes a second leg operated by a railway, say) and joint business ventures, such as the NS Hispeed-KLM joint venture. Ultimately, the most crucial factor
that will drive greater air-rail cooperation is infrastructure: it simply has to be in place if rail companies and airlines are to capitalise on the opportunities cooperation poses. A single ticket for an air-rail journey can be issued using technology available today, but this is dependent on a
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