Bahn checks expansion of ICE- and IC-tracks
At the end of June, German Rail denies specific plans for cutting long-distance train routes but discusses potential reductions according to a strategy paper. Prices, however, could increase.
Under pressure from mounting losses, German Rail is considering plans to expand ICE- and IC-tracks. According to a Bahn strategy paper, "we will adjust the offer and align it with the changed market conditions." In long-distance transport, the Bahn intends to respond to the shrinking commuter population and competition from the Germany ticket in local transport.
Trains should be deployed where demand is high. There, main routes could be expanded to a half-hourly schedule. In regions, however, a "reliable basic offer" should be provided - "wherever it is economically viable."
Additionally, higher prices are hinted at: The revenue should be increased with new passengers, as well as through "tariff conditions" this year. The Bahn declined to comment on the concept. The conglomerate is deeply in the red, with a net loss of 1.2 billion Euro in the first half of the year, after a minus of 71 million Euro in the previous fiscal year.
Significantly fewer customers in long-distance transport
The Bahn expects a billion-euro repayment from the Federal Government for pre-financing in track maintenance. Additionally, the Bahn aims to become profitable again in each business segment, from freight to long-distance transport. By the end of this year, the company will report a profit before taxes and interest of around one billion Euro.
In long-distance transport, the Bahn has lost significant customers. According to the company's figures, 64.2 million passengers used long-distance trains in the first six months of the current year - six percent fewer than in the first half of 2023. Extreme weather events, aging infrastructure, strikes, and accidents were cited as reasons for the weaker demand and poorer punctuality.
The decline in demand adds to the problems facing the German Rail. Recently, the company had always emphasized that the demand for rail travel was constantly increasing - despite all problems with punctuality. To its long-term goals, the Bahn includes doubling transportation capacity in passenger transport - that is, more traveled kilometers and more passengers.
Punctuality is declining
DB CFO Levin Holle emphasized during the presentation of the half-yearly financial report that there was already an upturn in June. June 2024 was the strongest revenue month in the history of long-distance transport. In regional transport, the company reported a six percent increase in passenger numbers compared to the first six months of 2023.
The punctuality in long-distance transport was at 62.7 percent in the first half of the year - a significant deterioration compared to the first half of 2023. The situation was particularly difficult in June. In several regions, there were flooding, dam failures, and landslides that also affected rail traffic. Almost every second train was delayed, meaning a delay of at least six minutes. The punctuality rate in June was 52.9 percent.
In light of these challenges, German Rail is contemplating the enhancement of ICE- and IC-tracks to boost capacity and meet demand in certain areas. As per the Bahn strategy paper, "we will adapt our offer and align it with the changed market conditions." To combat the decline in long-distance transport passengers and improve profitability, German Rail aims to increase revenues through higher prices and new tariff conditions.
