European rail: The imitation game

28 May 2016 by Alex McWhirter

Europe’s rail operators are mimicking low-cost airlines in a bid to grab back some of their market share, says Alex McWhirter.

For decades, Europe’s railway firms simply operated fast, reliable but conventional services. But things are changing. When construction of the first high-speed lines began several decades ago in France, the train firms were shielded from competition. Long-distance bus competition was prohibited; domestic air service was restricted. However, the past few years have seen big changes in the country. Low-cost airlines have appeared on the scene, prompting growth in domestic air travel.

The aviation sector has stolen a chunk of the lucrative long-distance business market. And as we have previously reported in Business Traveller, long-distance bus firms have been deregulated, leading to a nationwide network. It means that the somewhat old-fashioned (by comparison with those in the UK) train firms in mainland Europe have had to seek new ways to attract and retain passengers.

SNCF, which instigated the world-famous TGV 35 years ago, is again leading the field. The French firm has copied the business plan of the low-cost airlines. All tickets for its two new brands, Ouigo and Izy, are sold direct online, bypassing agents. Onboard service is limited or nonexistent, and there may be a charge for luggage. Their websites ape those of the budget airlines for simplicity and speed.

Even more revolutionary, as we see with Ouigo, is that SNCF has copied the Ryanair model of operating some services away from city centres to cut costs even further and to lessen chances of disruption.


Izy – pronounced “easy”, no doubt in a nod to Easyjet – was launched in April, covering the busy 300km route linking Paris with Brussels. It uses refurbished TGV trains and is a separate initiative to Thalys, in which SNCF holds a majority stake.

Nick Brooks, EU affairs advisor for rail agent Captain Train, recently sampled Izy and noted: “The same garish colour is everywhere: livery, seats, uniform. But just green instead of [Easyjet’s] orange.”

Two things other than price distinguish Izy from Thalys. First, whereas Thalys operates multi-voltage trains enabling it to run through to Amsterdam and Cologne, Izy uses simpler ones. And whereas Thalys takes the high-speed route between Paris Nord and Brussels Midi, Izy (while linking the same two stations) shuns the costlier high-speed line in favour of the “classic”, slower line.

It means Izy can take over an hour more to accomplish the trip: the journey time is between two hours eight minutes and two hours 30 minutes, against Thalys’s one hour 22 minutes. However, the ticket price is a fraction, possibly just a quarter, of the Thalys price. Cheapest one-way fares cost €10 but a seat is not guaranteed; folding or tip-down seats cost €15; standard class starts at €19; while standard XL (the old first class) starts from a bargain €29.

There are two or three Izy services daily. The evening departure from either Brussels or Paris booked at the standard XL tariff would seem a suitable option for business people. Canny travellers will book Thalys one-way (or vice-versa) in cases where Izy’s schedule doesn’t suit.

When Nick Brooks sampled Izy in April, he reported that the cheapest fares had sold out and that the train was well-loaded. “And my ticket really did cost €19… trouble is that my case cost €20,” he reported.

What about Ouigo? When it first started in 2013, it operated solely between Paris and Marseille but, unlike Izy, was using a modern TGV Duplex (double-decker). Now Ouigo’s network covers 17 destinations. Most of these are to the south of Paris, and more are planned.

Instead of operating from Paris Lyon, Ouigo runs from the city’s outskirts at Marne La Valée, Massy TGV and Charles de Gaulle airport. These stations may be located outside the city centre but many businesses are based nearby, and boarding at less busy places is often simpler.


Could the Izy concept be adopted by Eurostar, perhaps for London-Brussels? According to Brooks, there is demand. “I was talking to some European Parliament admin staff in Brussels this morning and this is what they wish, too,” he said. Still, this development is unlikely at present. As Business Traveller has reported, the Eurostar situation is unique thanks to the Channel Tunnel. The latter has its own regulations and technical standards, which means that only a few train types can transit.

In 2010, Germany’s Deutsche Bahn (DB) boldly announced that it wanted to compete with Eurostar on a number of routes, Paris excluded. DB even brought an ICE train to St Pancras International (the trainset had to be towed to London, because it wasn’t at the time approved to transit the tunnel).

However, it never happened. By the time the Channel Tunnel authorities had given the green light, DB had lost interest. So Eurostar continues to monopolise rail services from London to Paris and Brussels. There isn’t therefore much incentive for it to consider developing a budget option.

A spokesperson told Business Traveller: “We always listen to customer feedback. We know that some of the main reasons our customers travel with us are city-centre to city-centre travel, short journey times and our lowest-ever lead-in fares of £29 one-way.”

All the same, from a practical point of view, it would be possible, if it so wished, for Eurostar to start trains from the London suburbs (as Ouigo does) or take the classic lines on the other side of the Channel (as does Izy). It is true that Eurostar has cheap fares, but these can be hard to find at busy times. And whereas more and more bus firms are entering the market (including iDBUS – ironically, operated by Eurostar owner SNCF), they still carry only a tiny fraction of Eurostar’s passenger volumes. One must note that each Eurostar train accommodates either 750 or 900 passengers, compared with several dozen on one bus.

France’s Flixbus, the latest to enter the London-Paris market, has seats readily available for €9 one-way. The fact that a significant number of bus firms find it worthwhile to operate does, I believe, demonstrate that there is a demand for a low-fare or “lite” Eurostar product.

UK gets competitive

UK rail offers nothing as fresh as Izy and Ouigo, but what our privatised train firms do provide is simple competition on a number of routes. They provide more choice and usually keener fares, although they do not offer the same service frequency as the incumbents.

On the East Coast Mainline (ECML), “open access” firms Grand Central and Hull Trains compete with incumbent Virgin Trains East Coast (VTEC) out of London King’s Cross, while between London Euston and up the West Coast Mainline as far north as Crewe, London Midland offers an alternative to Virgin Trains.

Over the voluminous London-Birmingham trip, there is Chiltern Railways from Marylebone providing an alternative to the Virgin Trains service from Euston. Besides its regular “outer suburban” trainsets, Chiltern has invested in former British Rail long-distance rolling stock to woo business people.

These “silver trains” operate a number of services throughout the day, offer faster timings and come complete with a business zone (available for a supplement of £25 peak, £10 off-peak).

Another new service recently approved will allow First Group to compete with VTEC over the busy London to Edinburgh route. First Group will operate five daily trains in each direction between the English and Scottish capitals. The service, which will not commence until 2021, will be a budget one with seats costing about £25, and will suit some air passengers currently using Luton and Stansted.

The news hasn’t gone down well with VTEC, as it’s obliged to pay the government a franchise fee of £3.3 billion over the coming years, whereas First Group (an “open access” operator) escapes paying such fees.

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