Social Climate Tech News

Mon 01 2022

How to Treat Trains Like Planes the European model

by bernt & torsten

Crossing the border by train in Europe is more expensive than flying. Why is it so, and how can it be done?

n Europe the rain network was developed nationally, and each country has impressive train networks; crossing into another country can have

Taking a train from the city center to the city centre, say London to Paris, is much more efficient than flying the same route. Many choose to take the airplane as it offers cheaper tickets. Are the tickets cheaper if we count the auxiliary cost to get to and from the city centre to an airport?

If you count in the cost to travel to an airport from the city centre and the time it takes to travel to the airport, the time you have to be at the airport, and the time it takes to check-in, clear security checks and board the benefits of cheap air tickets vs a train ticket evens out.

Before there can be a pan-European train network in which you can travel from Narvik, Norway to Istanbul, Turkey, without changing trains, a few things have to be worked out:

  • First, the technological specificity of railways is characterized mainly by difficult and costly interoperability between rail infrastructures (namely tracks) and train operations (mainly locomotives and wagons). Such interoperability makes access competition difficult and adds complexity to tendering since investments in rail infrastructure and train operations have different time horizons.
  • Secondly, the fact railways are never self-financing. On average, a significant portion of any railway system will always be subsidized in the EU for approx. 50% of its costs. Furthermore, public subsidies are paid for a portion of the infrastructure and train operations, thus creating problems for tendering and potential market distortions, not to mention potential state aid problems.
  • The third is that many infrastructure managers or integrated companies are indebted, thus distorting the level playing field and raising issues concerning state aid rules.
  • The fourth specificity, while having existed for a long time, has recently been much exacerbated by digitalization, namely intermodal competition. Indeed, increasingly questions and decisions about anti-trust in railways will have to consider the evolution in adjacent markets, especially in the long-distance bus and the long-distance car-sharing markets.

Working on solving these issues, the European Commission will increase competition as the main tool to make railways more competitive and foster the modal shift from road to rail in passenger and freight. Neither modal shift nor competition in railways has happened significantly, even though both are not necessarily directly related. Indeed, modal shift (and in particular, the reduction of the use of the private car) depends on many other things, including oil prices, the internalization of environmental externalities on road transport, emerging intermodal competition with bus transport and new forms of sharing mobility.

Here is an excellent video explaining the European train network competition.


Leave A Comment