We’re creating a more connected travel industry, underpinned by sustainability and long-term investor relations.
Prof. Andrea Giuricin
CEO at TRA Consulting
Competition will be a reality from 2020 in the long-distance market for rail. In this blog post, Prof. Andrea Giuricin looks at already liberalized countries and expounds on the factors that national railways and new entrants must follow to get ready for 2020.
There are only two countries in the world that introduced competition in the high-speed rail market: Italy and South Korea. Other European countries have opened access to competition in the long-distance sector: Austria, the Czech Republic, and Sweden.
In 2011, Westbahn entered the Austrian market, operating the Vienna to Salzburg route. In the same year, in the Czech Republic, the Prague-Ostrava corridor opened to competition. Leo Express and Regio Jet started sharing the line with the national incumbent.
In 2012, Italy introduced competition in the high-speed sector, when NTV Italo entered the market with 25 AGV (Automotrice Grande Vitesse) train sets. So far, Italy, Austria, and the Czech Republic have experienced a positive passenger increase of 80% - 90% in less than 5 years for rail travel.
In Sweden, in early 2015, MTR express entered the market, operating the Stockholm-Goteborg corridor, increasing the demand by 20%. Lastly, in 2016, South Korea became the second country in the world to open access to high-speed rail competition, with Seoul's high-speed railway SRT. Its demand increased by 14% in less than one year.
So far, technology has been a key success factor in liberalized markets. Flexible rail technology solutions help new entrants and national railways to adapt their offer & pricing to new markets.
Aso, innovation has a strong weight on rail liberalization, not only within rail travel but also competing with other transport modes. In Italy, where the competition pushes innovation, the rail market share is increasing. On Italy's most important route, Milan to Rome, the train is taking away market share from the airplane, with a 75% market share, thanks to a much more innovative railway.
On the other hand, national railwaysalso have the possibility to answer to new competitors by adopting the right strategy:
Only if railways introduce innovation and use the right technology tools, will the rail market share increase. Soft technology investments are the success elements for tomorrow's railway. Rail technology is here, and it is waiting to be implemented to achieve efficiency in a more competitive market than ever.