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Article · January 11, 2024
Rail liberalisation as a catalyst for innovation
Rail accounts for 1.2% of greenhouse gas emissions against 25% for road. Competition, distribution platforms and a €100bn investment plan are reshaping the sector.
The dawn of the 1990s marked a major turning point for Europe: the opening of rail to competition, driven by the European Commission with the aim of creating an integrated, competitive European rail market. The objective today remains the same - tripling rail journeys by 2050, from a current 6% share of traffic. The United Kingdom, the pioneer, went through a turbulent transformation of a sector until then dominated by public entities, punctuated by challenges: fare volatility, safety questions, managerial complexity.
At the heart of this reform, decarbonising transport stands out as a priority. With only 1.2% of greenhouse gas emissions, against 25% for road transport and 12% for aviation and maritime, rail is the environmental champion of the transport sector. Competition stimulates investment in green technology, aligning the industry with global climate objectives.
In France, the opening of rail to competition in December 2020 brought new operators onto the market. SNCF now faces Spain’s Renfe and Italy’s Trenitalia, with their respective Paris-Marseille and Paris-Lyon-Milan lines, and traffic up 58% in barely eight months. This renewal comes with a diversification of services and a stimulating price war, forcing SNCF to rethink its offer - particularly its business segment, with privileged services such as complimentary drinks or meals delivered to the seat.
The customer experience benefits: quality of service, comfort, connectivity and journey frequency are now the watchwords of this competitive surge.
The rise of distribution platforms such as Rail Europe, expanding across Europe, illustrates this digital revolution - simplifying access to offers and enabling end-to-end multi-operator journeys and interrail passes. SNCF Connect is also evolving fast, innovating in its communication with a personalised and playful annual review.
After business travel agencies, leisure agencies are adapting by integrating rail into their packaged offers, or even creating rail-specific products. Distribution tools are evolving accordingly: Resaneo is innovating with a dynamic package engine allowing real-time combination of different travel components, including train tickets. Quartier Libre is enriching its digital experience with its Open Package tool, offering greater flexibility in building tailor-made trips. And customer appetite for eco-responsible products is driving new products and even specialised agencies such as Discovery Trains.
The digital era opens unexplored horizons for rail: the return of night trains, start-ups such as Le Train, and investment from hospitality players like Accor with the Orient Express. From hyperloop to autonomous trains and interconnectivity, the horizon is wide open. These advances could accelerate thanks to a government investment plan of €100 billion in France over twenty years, announced in 2023 - promising a rail revolution to match twenty-first-century ambitions.
An article by IMPACT CONSULTANTS.
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