The French and German rail networks are feeling the heat from both air and ground competitors. Alex McWhirter reports on what it means for travellers

The number of passengers using UK rail has doubled since 1996. It’s a growth business – even this year’s annual fare rise has not discouraged 5 per cent more travellers from taking to the trains.

It’s a different story on the Continent, however. The national networks in France and Germany, once held up by critics here as examples that UK rail should copy, are reporting stagnant passenger numbers.

What makes it worse is that the traffic slump is being seen at their flagship high-speed ICE and TGV businesses, in which the governments of Germany and France have invested billions of euros.

What’s causing it? In the case of France’s SNCF and Germany’s Deutsche Bahn (DB), the anaemic passenger volumes are down to factors such as the recent economic recession (so more travellers now seek a good deal), domestic airline competition, the arrival of deregulated buses in Germany, and the growth of car sharing in France.

Not everyone wants to pay a premium for their rail tickets to rush from A to B at 300km/ph. But often they have little choice – the trend being for rail firms to axe their conventional trains over the old route once new high-speed lines open.

At the same time, budget airlines’ fares can be highly competitive with those of second class rail journeys, let alone first class.

In Germany, the buses have affected DB. Germany deregulated its long-distance bus market in January 2013, and France is set to follow in the near future. UK rail has faced similar bus competition for decades, so France and Germany are simply catching up.

In Germany, bus deregulation led to a large increase in the number of bus firms. These have developed a comprehensive network serving not only towns and cities but providing links between cities and the airports. This attracts business people who may be unable or unwilling to drive to the airport.

According to industry magazine International Rail Journal, bus ridership has grown from eight million in 2013 to between 15 and 20 million last year. Expect that figure to show another big increase this year thanks to the current series of DB strikes – by the end of May, there had been no fewer than nine shutdowns in 12 months.

Although passenger numbers by buses represent only a small fraction of those carried by DB, they mean a loss of lucrative long-distance revenue.

Perhaps that’s why DB has itself become a bus operator. It holds a 10 per cent share of the overall bus market and, in some cases – a good example being those slow and circuitous links between parts of Germany and Poland – it has replaced trains in favour of buses. Not only are the latter cheaper to operate, but passengers find them to be faster than the cross-border trains.

After being thwarted by the complexities of operating high-speed ICE trains through the Channel Tunnel and into London, DB threw in the towel. It now operates to London but using its buses rather than its ICEs.

When it held a large media event in London several years ago to promote ICE trains to London, it seemed everything had been sorted. Fast forward and instead of being whisked to London in a matter of hours by ICE, fans of DB must endure an overnight bus ride.

Ironically, we now have a situation where DB’s bus business is expanding at the expense of its rail business. Not only are DB’s buses fuller than its trains (latest figures are 55 per cent compared with 48 per cent load factor), but the bus business also grew by 18.9 per cent last year, whereas its rail business rose by only 0.7 per cent.

Still, DB has a solution. It plans to turn itself around and carry 50 million more passengers annually on its long-distance ICE network by 2030. DB is planning ICE services running at 30-minute intervals, plus both new and refurbished trains.

In France, SNCF is also seeing no growth in its flagship TGV division. The country has yet to feel the impact of bus competition but, to prepare itself, it has, like DB, founded its own bus company, iDBus. As with DB, iDBus operates internationally in competition with SNCF. An example is the service linking Paris with London competing with Eurostar, in which SNCF is the majority shareholder.

To revive TGV fortunes, the firm will upgrade existing Duplex trains and introduce new trainsets over the next four years. A new seating design will be unveiled in September, which will enable SNCF to squeeze in an additional 100 passengers on to each Duplex, bringing the capacity of each train to around 550 passengers.

It could be that some first class accommodation will be removed from these trains, but the significant extra capacity suggests SNCF will adopt “slimline” seating, which, as some airlines have found, are space-efficient. The tariff structure will also be overhauled next year with a clearer pricing structure.

Domestic air competition is also causing problems for DB and SNCF. In previous decades, the rail companies never felt competition within their home markets. In France, in the days of domestic Air France subsidiary Air Inter, the airlines were ordered to charge higher fares than those levied by SNCF to protect the latter.

The situation was worse in Germany as Lufthansa – which in the 1980s dominated all main routes – wanted to abandon domestic flying altogether so regional passengers would have to take DB to the hubs of Frankfurt and Munich.

There was such an outcry from the business community that the move was scrapped. Corporate travellers said that if they couldn’t take domestic flights from the likes of Stuttgart, Dusseldorf or Nuremberg to Frankfurt and Munich then they would simply defect to foreign airlines and route instead via London, Paris or Amsterdam.

Today, air competition is much fiercer. In Germany there is Lufthansa, Germanwings (soon to be Eurowings) and Air Berlin. Soon, Ryanair will join them. Seeing a market opportunity in the current passenger dissatisfaction with DB, the Irish airline will launch its first German domestic route – Cologne-Berlin – in September.

SNCF sees competition from both Air France and Easyjet, although SNCF has its own low-cost subsidiary in the shape of Ouigo.

Whether these developments will turn around the fortunes of DB and SNCF is unknown. Much will depend on the economic situation, and how effective future bus and air competition prove to be.


Why is UK rail probably the only large European network experiencing passenger growth?

  • More business people routinely take the train on major business routes linking London with Birmingham, Manchester, Leeds and so on.
  • Some companies advise staff to take the train, even on long journeys, so that the firm in question can claim to be “eco-friendly.”
  • More user-friendly promotional fares backed up with a range of railcards that are usable by many, if not most, travellers.
  • Newer trains operate on many British routes.
  • Better marketing.
  • More young people have taken to the train, often because they cannot afford the cost of buying and running a car.
  • Growth in the student population who regularly return home.
  • Long-distance commuting, especially in the South East, by people who cannot afford or are unwilling to shell out for London property prices.