United Europe hosted an Advocacy Webinar on the 17th of March, with a topical focus on how Europe’s rail operators are coping with cross-border travel and tackling the Ukraine crisis. Matthew Parsons, Editor at Skift, a travel intelligence company, moderated the discussion. On the panel were public affairs experts of Europe’s rail operators and a representative of the European Commission: Kathrin Obst, Deputy Head of Unit, Single European Rail Area, DG Move at the European Commission, Iga Niznik, EU and International Affairs Manager at ÖBB, Christoph Lerche, Head of Transport Policy Europe at Deutsche Bahn and Jeremie Pelerin, European Affairs Director at SNCF. Our panelists had the inside track on all the political wheeling and dealing in the corridors of Brussels and together with the moderator they explored European rail challenges and opportunities and why riding the train is still not as popular as flying.
“We would like people who travel internationally to look at the rail as the default option”, said Kathrin Obst from the European Commission. Together with the Member States, the EC makes sure that the legal framework is working. There are some challenges ahead such as interoperability, taking rolling stock from one country to another, shortage of staff, establishing a level playing field with other transport modes, ticketing and harmonizing signaling systems. Rail infrastructure has to be strengthened. The Trans-European Transport Networks Regulation gives a blueprint of what the infrastructure in Europe should look like with a stronger focus on high-speed networks, especially in the East of Europe, and better inclusion of airports. It is not about rail against air but more about how to cooperate better and how to create climate-friendly options to travel. “Intermodality is key when discussing how to reach the climate targets and how to offer attractive services”, concluded Christoph Lerche from Deutsche Bahn.
The panelists started off by talking about the current relief efforts rail operators are involved with when it comes to Ukraine:
Austrian Railways, the ÖBB, give free tickets to Ukrainian refugees and approximately 21,000 tickets have been issued so far. Iga Niznik highlighted that the ÖBB built on the experience they gained back in 2015 when they tackled a similar situation. OBB is also supporting Polish Railways with additional rolling stock. Poland’s borders are very crowded, and Polish Railways urgently need additional trains to move people away from the border.
Deutsche Bahn also provides free train tickets for people arriving from Ukraine with the so-called “help Ukraine” ticket. Until today Deutsche Bahn has issued about 128,000 help-Ukraine tickets, said Christoph Lerche. Deutsche Bahn also provides buses transporting people directly from Poland to different locations in Germany. At Berlin Central station a central welcome hub has been established together with volunteers, NGOs and local authorities. Deutsche Bahn also established a cargo subsidiary, a railway humanitarian bridge from Germany to Ukraine. The train is still the most secure mode of transport that works in Ukraine and Deutsche Bahn tries to ship as much humanitarian aid as possible as far as possible into Ukraine directly.
SNCF is seeing fewer refugees arriving in France by train simply because it is further west, Jeremie Pelerin said. SNCF is granting free tickets for Ukrainian refugees, who are arriving from Belgium or Germany to continue their journey. SNCF has installed special facilities in the main train stations across France in cooperation with the Red Cross and organized buses. SNCF is also participating in the humanitarian bridge together with Deutsche Bahn to bring goods from France to Germany and Romania to Ukraine.
“There is a huge communal effort from the transport operators to help”, Kathrin Obst from DG Move said. The European Commission activated the temporary protection scheme at the EU level, which gives Ukrainian refugees the possibility to settle freely within the EU and access to education and jobs. It is the first time the EU gives legal status to refugees without having to apply for it.
Matthew Parsons, Skift: The European Commission launched a rail action plan in December and said that cross-border trips account for just 7% of the kilometers traveled by train in Europe. Why is this such a low figure?
Kathrin Obst, DG Move: That figure just says the main business of railway companies today is taking commuters to work and domestic business travelers from A to B and the main focus of rail companies today is not yet international travel. It doesn’t mean that there’s a lack of performance on the rail side. It means that we would like to strengthen it. We would like people who travel internationally to look at rail as the default option: we are working with the Member States to make sure the legal framework is working, and we are encountering obstacles there. For example, technical problems with interoperability. Then there is the problem of taking rolling stock from one country to another. Harmonizing signaling systems is an important element: We are rolling out a signaling system called ERTMS that will make that easier. We’ve proposed a strengthened infrastructure network for rail. So together with the action plan, we presented the trans-European Transport Networks Regulation, which gives a blueprint of what the infrastructure in Europe should look like.
It has a stronger focus on high-speed networks, especially in the east of Europe and better inclusion of airports. It is not about rail against air but more about how to cooperate better. Then there’s a problem with rolling stock availability. It’s not easy, for new companies to get funding for rolling stock. There’s a shortage of train drivers and know-how of usage in different countries. If you want to run a train today, you must book yourself a train path. You can’t just decide to drive back on the motorway. You have to book the train path going and coming back. The way those train paths are allocated is quite complex. And the legal framework is a little rigid. It was built on a system where there was enough capacity for everyone. But today we find that capacity is actually quite scarce and it has to be managed a bit more efficiently.
There’s the question of track access charges we find that in particular passenger trains pay quite high track access charges. That charge brings up the price for the end consumer. If we are in competition with aviation, is that really the way we want it to be or is there another way of looking at that? Ticketing is a big issue. We will come up with a legal proposal on ticketing at the end of this year. There’s a question of the level playing field with other transport modes. There are tax exemptions for aviation, but not for rail. A Ryanair ticket costs €40 whilst the train ticket costs much more. We’ve addressed some of those questions already with the „FITFOR55“ package that the commission put forward last summer. We’re working with the Erasmus Program to strengthen the rules about how you travel to your destination, to make it more attractive to use the train. That’s not the biggest thing but it’s important that young people start using trains – that’s the aim of the action plan.
Matthew Parsons, Skift: Interesting to hear a lot about the infrastructure and ticketing. Jeremie, from your perspective, what did you make of the action plan?
Jeremie Pelerin, SNCF: I would say as far as the SNCF is concerned; we broadly support the action plan. We share the same vision as the Commission for a strong role for rail in the future of cross-border mobility. There is still a lot to do to improve the situation. If you take the issue of track access charges. This is an important issue in France because we have very high track charges. But it’s also a way to finance investments in infrastructure. So if you decrease the charges, you must find other sources to finance infrastructure investment. And although we are in a period where you see public spending increasing following COVID and probably also the Ukraine crisis, we are not reassured when we look at their long term.
Matthew Parsons, Skift: Iga, from your perspective, do you agree with the action plan or do you have any other priorities on the agenda?
Iga Niznik, ÖBB: We believe it’s a very positive step towards sustainable mobility. On the level playing field, we would have loved a little bit more ambition. And secondly what worries us, is the lack of finance. We need infrastructure where the trains can run. We need financing for digitalization to make things more efficient. And we don’t see the investment that is needed. In Austria, we have a very rail-friendly government now. But if we leave it to the member states to finance all those things, we are afraid it’s not going to happen.
Christoph Lerche, Deutsche Bahn: We also very much welcome the action plan. We think that it is pointing in the right direction. We welcome this clear commitment of the European Commission to foster cross-border transport in Europe. Regarding the level playing field: It is a strange situation that for flights within Europe there is no value-added tax and for many cross-border trains there still is. It’s good that the commission wants to tackle that. Infrastructure is the mother of rail transport: Without infrastructure, we can’t run attractive services. That‘s definitely the priority at the moment alongside initiatives of fostering technical interoperability. The Commission has done a lot already, but there are still some steps to be taken. One aspect where we don’t agree is ticketing: There is a lot of homework to be done by public stakeholders but also by the railways. We must do our homework to improve the quality of service to make travelling by rail more attractive.
Matthew Parsons, Skift: It’s in everyone’s interest to have a level playing field because otherwise, you’re not going to have people travelling as much between countries and in terms of infrastructure it all comes down to investment. Kathrin, what is your response? Who pays for making all these rail connections consistent? Is the EC responsible or is it on the member states individually to pump money into their infrastructure?
Kathrin Obst, DG Move, EC: The EU has the money that the member states decided to give the EU in long-term budget discussions. So at the end of the day, it’s taxpayer’s money and whether it comes from the EU or the Member States is maybe not the most relevant question. We invest very heavily in rail infrastructure; infrastructure is key. You can’t run a good train service if the infrastructure is not good. And if we look at our modelling of how we progress towards decarbonisation, the completion of the TEN-T network is a major point. Without that, we will not reach zero carbon. We have the Connecting Europe Funds which is a significant amount of money that we invest in cross-border projects. And we’ve also just injected as part of the COVID recovery, close to 50 billion dedicated for rail and rail projects only. And this is more money than we’ve ever had under the Connecting Europe Facility.
Matthew Parsons, Skift: Jeremie mentioned the ticketing aspect: I’m wondering if you think enough is being done between the rail companies when it comes to the ticket data. Is it easy to book cross-country rail tickets on one platform? Do some of the rail operators perhaps want to keep hold of that customer and not really share data?
Kathrin Obst, DG Move, EC: There are different things we would like from ticketing. It’s important that you look at ticketing from the passenger perspective, that’s who we’re doing it for. People find changing trains very stressful sometimes. And realistically, if you’re travelling over longer distances, it’s very rare that it’s like one train that takes you from A to B. You’re going to have to change trains. If you’re combining train offers between Deutsche Bahn and ÖBB or SNCF and Deutsche Bahn, you need to know that if something goes wrong when you miss a train, you’re not going to be left on your own. And to be fair to the rail companies, I think a lot of work has been done in the last years. Rail companies are in competition with each other sometimes. Obviously, Deutsche Bahn and ÖBBB, not so much. But if you were to take the Flix trains that are on the same market, then you would not want to sell your competitor’s tickets. As a passenger, you still want to be able to find the complete offer somewhere and buy those tickets. And I think that’s where the legislation is needed because it’s not actually fair to expect the companies to behave in a sort of counter-competitive way.
Matthew Parsons, Skift: There’s one ticket called the Climate Ticket, which offers unlimited travel. At Skift, we write a lot about subscription packages, which hotels are launching and even airlines. What’s your take on offering more of those to people who want to travel to other countries on a subscription basis?
Iga Niznik, ÖBB: I can tell you that the climate ticket has been very well received in Austria. The ticket costs €3 per day. So that’s about €1,100 a year. You can travel the whole of Austria. You can take any bus or train. It was very popular, but this also came at a price: the taxpayer financed it. And our Minister of Climate made it possible after having predecessors for 15 years not being able to do it.
Matthew Parsons, Skift: Jeremie in terms of ticketing, are you happy with how SNCF offers tickets?
Why can’t trains take a similar approach as flights? The airlines are in competition too and one can buy tickets for any route. What’s your take on that?
Jeremie Pelerin, SNCF: Train operators are already working together very strongly to bring improvements, and I mentioned the ticketing roadmap. We’ve joined forces for four high-speed connections with Deutsche Bahn, Eurostar, the Netherlands and ÖBB. We’ve created a red team alliance and the rating of alliance allows each passenger to board without a charge on the next available train if they miss a connection. So there’s already something coming from the industry directly to provide a solution to these cases of cross-border travel. So it’s not as if there was nothing done by the sector in terms of ticketing. Of course, there are different approaches, but each railway operator has its own ticketing system. And we have a big platform in France, which is called SNCF Connect, which has very much developed in the last year to offer connections to local public transport. In France, the focus was indeed firstly on domestic, but it’s also a way to sell through this platform international railway tickets. And of course, we also work with third-party ticket vendors. Trainline is selling SNCF tickets and cooperation with ticket vendors is already governed by competition law.
Matthew Parsons, Skift: Let’s talk about sustainability briefly. The FITFOR55 proposals aim at a reduction in carbon emissions by 55% by 2030. Due to the COVID impact, Air France was having state aid. And one of the conditions for the money from the government was to stop short-haul flights, under two and a half hours. Austria had a similar thing and obviously, rail companies are stepping up. So Christophe, let‘s talk about how you work with Lufthansa, for example. Are you taking more share from the airlines or are you working with them in a more collaborative way?
Christoph Lerche, Deutsche Bahn: Intermodality is key when discussing how to reach the climate targets and how to offer attractive services. And so we believe in close cooperation with airlines. They are, of course, competitors also. One of the important offers we are making is the so-called Lufthansa Express Rail, which means that the common aim is to reduce CO2 emissions. So also Lufthansa recognizes that for short-haul flights, there isn’t always a good reason here. And they should be abolished as much as possible. There are no regulatory measures in place in Germany. They are not planned, to my knowledge, at the moment by the German government. That is a little bit different from the situation in France. Lufthansa Express Rail means we offer rail connections from 24 cities in Germany to Frankfurt, which is the main hub for Lufthansa.
We have a CODESHARE collaboration with Lufthansa with one ticket for your train and flight: It’s a ticket with a Lufthansa ticket number, and you can use it for your Deutsche Bahn train as well. You can check-in before you board the train. You take the train from for example Berlin to Frankfurt with your Lufthansa ticket and you enjoy special conditions on the train. There is even additional staff on the train to care for those travelling with luggage. So it pretty much feels like flying already. When in Frankfurt there is also a very good infrastructure for the passengers: There is an air-rail terminal very close to the rail station where passengers can check-in and dispose of their luggage after arriving by train and walk to the terminal.
We are trying to offer a very attractive customer experience together with Lufthansa. It is a win-win. Of course, it helps us to have more passengers on our trains. On the other hand, it also helps Lufthansa to show that they are working to improve their climate balance and to concentrate on the routes where it really makes sense to fly.
Matthew Parsons, Skift: And Jeremie, from the SNCF, I guess you’re working with Air France a lot. Is there a huge uptake in rail journeys because of Air France being told, they can’t do these routes anymore?
Jeremie Pelerin, SNCF: For the routes where the ban is imposed, rail already had a significant market share. What I should underline is that the market works when there is a quality offer with high frequency and a short duration of the trip. Of course, it’s much easier to go from the city center to the city center without going to the airport and having transfers back to the city and to the city and back to the city. There is always the issue of price and here the issue of the level playing field comes in again. But the market works in terms of attracting passengers to high-speed connections that are really reliable, fast and working very well. And we’ve seen that already before airlines were banned for short hauls from Paris to Bordeaux, where rail already had a very significant market share. We have a very similar situation in France as the one described by the Christophe from Deutsche Bahn, we have partnerships with 12 airlines where we can buy tickets combining a long-distance flight with train tickets connecting more than 19 cities in France as well as Brussels to our airports.
Matthew Parsons, Skift: Kathrin, the EU has these quite ambitious carbon reduction goals for the member states. What’s stopping the European Union from just doing more to ban short-haul flights? And will banning short-haul flights push people towards rail in the end?
Kathrin Obst, DG Move: I think it’s a little bit like Jeremie said, either there’s an attractive alternative and then people will take the train anyway or there is no attractive alternative. And then you shouldn’t tell people that they can’t fly. The way to do it is to improve the offer. What the railways are doing with the airlines works very well. Where the infrastructure is good and the services are good, it’s totally feasible for railways to replace flights. More infrastructure is being built, for example, in Germany, you just had the completion of the Munich Berlin link which has brought down journey times considerably. This has a real impact on passenger numbers. What I don’t see being properly in focus is the offer for tourists. Someone who wants to go to Barcelona for the Easter holidays finds it very difficult to find a train offer.
Matthew Parsons, Skift: Someone working for a travel management company that works with multinational companies who want travellers living in one EU country flying to another to be able to book online within that travel agencies booking tool. And apparently, that’s currently very limited. Is it possible to book through one booking platform? If anyone wants to pick that one up.
Christoph Lerche, Deutsche Bahn: One really would have to look at the specific case. We have corporations with a lot of platforms. But of course, it doesn’t cover all the platforms. It’s based on commercial agreements, and we see it as a complementary offer. We sell the majority of our tickets through our own channel Bahn.de, the most frequently used travel platform in Germany.
Matthew Parsons, Skift: It sounds like there are huge amounts of work being done behind the scenes and lots of reports and action plans. But there is still lots of work ahead. What is your priority for the year ahead? Catherine, obviously you’ve got the action plan in place, but what is at the top of the agenda for this year?
Kathrin Obst, DG Move: Top of the agenda is trying to make rail the default mode of transport that people want to use when they move around Europe. And I think the railways have a fantastic network as it is. It’s a really good product. It’s a very attractive service. So there’s a huge amount of things that are really good. And now it’s a question of making it better for those people that we’re not yet reaching. And some of it is up to the companies, some of that is up to member states because funding is an issue. Some of the ticketing things are domestic and some of it is up to the commission.
Christoph Lerche, Deutsche Bahn: We want to make rail the number one transport mode in Europe. I think railways really have a big chance at the moment. There is a window of opportunity. There is a lot of public support from the political state stakeholders. The climate discussion, of course, is helping a lot and is raising awareness. And I think at the moment pretty much everyone agrees that rail is part of the solution to reach the climate goals, the Green Deal goals, the climate goals of Europe and also worldwide. We appreciate the initiatives to improve level playing fields, to help in terms of infrastructure, as has been mentioned as a key decisive factor. And on the other hand, we are of course, happy and ready to do our homework in terms of improving the quality of service, in terms of working towards an intelligent European network, with intelligent hubs to connect the cities in Europe, the main cities and the regions. And we have to work on intermodality as well in terms of cooperation, for example with airlines, but also to improve door to door mobility. We can reach that goal to be the number one mode of transport in Europe.
Jeremie Pelerin, SNCF: At SNCF, we have the objective to double the traffic for rail passenger transport and rail freight transport. It also includes passengers cross-border. To reach this objective, we need to work all together and put a lot of effort as explained by Christoph, also into the quality of service. But we need also significant investments today. Rail infrastructure is not able to carry such an increase of modal share. There is a need for improvement, modernisation of the networks, new high-speed lines new tracks to go around the cities and so on and so forth. And I think we all share the political objective. We’ve seen emissions from the transport sector still increasing. They represent 25 to 30% of the CO2 emissions in the EU. We need to act on that and rail is part of the solution. But we still have a lot to do if we want to achieve this objective. So a lot of commitments are needed both from the sector and also from policymakers because eventually, they decide what they will invest.
Please find the full recording of the webinar on our YouTube channel.
Please see Skift’s article by Edward Russel who picked up on the Advocacy Webinar and contextualised it with air travel: “Trains offer new promise in Europe’s quest to cut aviation” on Skift.