Board members at Germany's Deutsche Bahn will meet on Wednesday to decide the fate of the Bahncard.
DB is facing a period of austerity. Its passenger numbers have stagnated while at the same time its service performance has deteriorated.
Not only has DB's reliability and punctuality been slipping, but it is now losing well over a million passengers a year to new bus company rivals like MeinFernBus, DeinBus and ADAC Bus.
Bus liberalisation in Germany is relatively new. Before January 2013, DB monopolised long-distance surface travel in Germany.
But liberalisation, aimed at providing customers with more choice, allowed the formation of dozens of bus companies. Their offer of cheap fares combined with modern and bright coaches, struck a chord with passengers.
DB underestimated how its business would be affected. Even though the bus companies carry only a fraction of DB's long-distance passenger traffic, the sales losses (to DB) in the medium-term are reckoned to be €240 million per annum.
Buses are cheaper to operate than trains so that is why they undercut DB. And, ironically, DB itself finds that it can operate its own IC bus services than it can its trains (see news, December 3).
Latest figues show that while DB's long-distance passenger traffic is barely growing, that of the bus firms increased by 8 per cent over the past year.
DB believes it can both retain passengers and save money by scrapping the famous Bahncard (railcard) in favour of a loyalty scheme, according to a report in tagesschau.de.
Unlike the UK, where railcards are issued to select groups of travellers, the Bahncard is available to all and sundry. Not only that, but the discounts can be more generous although, to be fair, Bahncard is more expensive than UK railcards.
But the fact that Bahncard is readily available means that regular foreign visitors, both for business or leisure, buy the Bahn so that they can travel cheaply within Germany.
DB believes the Bahncard no longer generates the loyalty it was once designed to do. It reckons that abolishing the card will save a fortune because, unlike at present, it will no longer have to provide 50 per cent discounts at peak times when all seats could have been sold at normal prices.
But if DB does decide to axe Bahncard it will do so at its peril. Bahncard holders are vocal and DB's previous attempt to scrap the scheme led to violent protests, says tagesschau.de.
Alex McWhirter
