While a fourth high-speed offering is due to hit the market in Spain, in France, the competition against the SNCF TGV is really struggling to emerge. Only one player has launched, the Italian giant Trenitalia in Paris-Lyon-Milan, with any success.
The ambitions of the local players collide with the harsh reality of the market. “For some new entrants, entry costs, including the acquisition of rolling stock, sometimes remain an obstacle to the launch of new services. I wish we could identify solutions to increase the total number of trains in service for the benefit of all “, declared Clément Beaune, Delegate Minister of Transport last October at the colloquium of theFrench Railway Association (AFRA).
This is the case of the company LeTrain, whose project, however, is advanced and whose objective is the circulation of high-speed trains between Arcachon, Bordeaux, Angoulême and Poitiers. The goal is to run 50 trains a day from the first year, that is, 3 million passengers a year.
Less cautious banks
Problem, its commercial release schedule is constantly being pushed back: first scheduled for September of this year, it shouldn’t take place until late 2024 at best.
This delay is all the more paradoxical since the operator claims that it has made a lot of progress in its strong financing plan, in particular with the arrival of Crédit Mutuel Arkea and Crédit Agricole. An essential step that has long been problematic.
Convincing the banks was not easy since this type of project arouses the reluctance of the financial sector given the colossal sums to be invested.
“Today, we are financed to the tune of several tens of millions of euros (50/60 million, editor’s note) and two fundraising events are underway, in particular for rolling stock (a cost of 350 million euros, note from the publisher)”, he explains to BFM. Business, Alain Gétraud, CEO of LeTrain.
Above all, “today, we could start if we had the used equipment we want,” he says.
Lack of political momentum
Problem, the virtuous model chosen by the operator by investing in second-hand equipment, refurbished TGV trains, would not really find an echo on the side of SNCF Voyageurs, owner of this equipment.
Alain Gétraud also regrets the passivity of the public authorities on this issue of opening up to competition. “The regulator is aware of the issue but does not have coercive means, a strong political impulse would be needed. He has to move forward, we cannot afford to wait any longer for the SNCF ”. Especially since the company multiplies the calls for the planet and the use of the train just like the government in other places.
Is the historical operator resisting, protecting its backyard tooth and nail?
This regulation refers to the presence of chemical substances and their detection in products sold in the EU and gave rise to an order in 2019 on the identification of asbestos before certain operations on railway rolling stock. However, some refurbished TGV trains contain this carcinogenic substance.
SNCF Voyageurs takes refuge behind European regulations
“LeTrain is fully aware of this legal impossibility and has never been able, despite our requests, to produce a legal analysis challenging this regulatory impossibility to deliver our equipment to them,” he continues.
Therefore, the new company must change its plans. “We can establish partnerships with other European rail players. And we have pre-configured an order for new equipment from a European manufacturer, we will make announcements in early 2023,” explains Alain Gétraud.
The fact is that the choice of the new is in contradiction with the eco-responsible philosophy of the future operator. Of course, it is more expensive, more carbon intensive and does not allow you to go fast. “Delivery is not expected before 24 to 36 months,” he laments. Hence the postponement of the launch to 2025, 2024 at best if LeTrain finally manages to get its hands on used equipment.
Alain Gétraud, who has spent his entire career on the railway, perhaps did not expect so many blockages. “It lacks momentum at all levels,” he repeats. “It’s a shame because it can be done very quickly, due to decarbonization, proximity, modal change, at some point you have to leave, not in 10 years”…
Competition in rail: very concrete benefits
The benefit of competition is obvious to all players and observers. Even for the SNCF. It allows to increase the quota of the train in the trips, the cake to distribute. And lower prices.
In France, according to a Trainline study, all operators experienced an increase in ticket sales between the end of December 2021 (arrival of Trenitalia) and the end of August: +18% for TGV, +57% for OUIGO and above all +176 % for Trenitalia. Trainline thus notes a total average increase of 58% on the Paris-Lyon line, “which shows that everyone is a winner in a competitive market”.
Regarding fares, the ticket purchase platform indicates that the average price for a Paris-Lyon journey, all combined trains (TGV, OUIGO, Frecciarossa/Trenitalia) has gone from an average of 45 euros to 42 euros since the opening in competition, a decrease of about 7%.
In SpainCompetition has allowed rail traffic to increase by 13.7% in one year, and 37% only on TGV lines, according to the regulator of a country where cars reign supreme.
In Italyprecursor to the opening to competition in 2006, the TGV market has doubled in the last 10 years and prices have fallen by 41%.
Not to mention the improvement in the quality of service for all established operators in the face of competition from new players…
Source: BFM TV
