The railways after covid: between challenges and opportunities

Is it still necessary to talk about the Covid-19 at the risk of getting a gesture of weariness? It is however necessary to review the situation and to take a perspective. The railway sector, which is already so difficult to manage at all levels, will once again have to face many challenges, which could also be opportunities if we take the trouble in some cases to undertake a « mental shift ».

It is quite clear that the pandemic of 2020 has provided a devastating wind. As told IRJ last summer, everywhere in the world, transit and railway operators were facing vast funding shortfalls despite receiving stimulus funding to maintain operation in the early weeks of the pandemic. European passenger operators were reporting falls in revenue of up to 90%. A group of European mass transit operators predict a global €40bn shortfall in farebox income. Social distancing, stay at home, self-isolate and homeworking are of course the main responsible of this situation.

People were invited to occupy one seat of four and trains are running empty. Some critics wondered why all ICE long distance trains in Germany were remained in service but with only 10% people on board. The argument was that pre-pandemic capacities had to be maintained in order to guarantee social distancing. This provoked lively debate, as this thesis suggests that people will take another train when the first one is full. This has proved correct for trains with compulsory reservations. But it was wrong for regional traffic, because working hours do not change, so there was no question of changing trains and arriving late to work. So a whole reorganization of the society appeared, with many people teleworking and others who had to be on site but with more suitable working hours. The railway sector has thus been confronted with challenges that call its business into question. Peak hours are lighter, there is less revenues and the concept of pass is taking on a whole new meaning as some people only physically go to work a few times a month instead of every day. It’s the whole pricing system that will have to be reviewed and this makes it even more difficult to finance public transport, whether by train, bus or metro.

Another, more political problem has emerged: private operators, who can only live on ticketing revenues. Longstanding opponents of private operators took advantage of this to assert that these companies, already considered « guilty of eating off the railway workers’ plates », had only left to fend for itself with their shareholders. But these companies were quick to retort that it was governments that took « their bread » away from them, by confining people at home. It’s like banning the delivery of flour to the baker and forcing him to make bread anyway! In the context of public service delegation, government decisions were considered by some legal experts to be breaches of contract, as these contracts implied growth ratios in the number of travellers, which were abruptly halted.

In some countries, this has led to heated debates about who is responsible for what. Austria seems to have found a way out by granting both ÖBB and WESTbahn a temporary public service contract in the form of a quota of trains to be operated between Vienna and Salzburg, with in addition financial support. In Great Britain, the pandemic has put a definitive end to the franchise system, which had already been in poor shape for several years. But instead of nationalizing, which would have cost the state a huge amount of public money because of the current contracts, Great Britain is moving towards a new form of concession that is closer to what is done in Northern Europe.

The challenges of tomorrow are to redraw the contours of the railway sector. The pandemic is completely changing the landscape and accelerating the transformations. Several questions require quick answers:

To what extent the State should intervene in the rail sector and public transport, in this new context of teleworking and less travel;
Is there a mental shift among decision-makers to admit that the railway sector is plural, and no longer mono-administered as in the past?
What are the public’s perceptions of these travel restrictions, and what is their attitude towards another somewhat forgotten subject: the climate emergency?

It is already possible to quickly contradict certain currents of ideas launched by among groups that are very active on social networks:

We will not back to the ancien world with ideas based on the conservation of a social and industrial heritage. Society is changing, so the social environment will also change. The post-covid world does not mean the end of other competing modes of transport, nor the introduction of authoritarian policies favouring social control or a stop to technological progress;
There will be no return to collectivism. On the contrary, the sharp increase in cycling shows that people want to control their own travel and no longer depend on political-managed offers and restrictions;
There will not be a degrowth but a « different growth ». We can foresee a strong acceleration of digitalisation while promoting a decrease of travel and unnecessary journeys.
At present, no one can say for certain how traveller behaviour will be different once the coronavirus has run its course. Looking to the long-term, once efficient sanitary measures are put in place, it is likely that air travel will resume, causing a rail demand only amongst certain age groups.

It is therefore an opportunity for rail to integrate all these challenges by transforming them into opportunities. The future of rail will depend on two key factors: a mix of service and technology.

The importance of service
How can we exceed the individual comfort of the car and the speed of the plane? By providing high level service! We are still a long way from that. The high-speed train has certainly made it possible to eliminate the use of airplanes for 300 to 600 kilometres. But the comfort of these trains does not yet reach that found in private vehicles. To eliminate this feeling of « wasting time by train », travelers must be distracted. This is achieved by the wifi on board, which allows travelers to keep busy, to occupy the « dead time of the journey » with useful time.

But on-board wifi is also a business, by allowing not only for a better internal knowledge of the routes and their frequency of use, but also valuable data to be collected and customer tastes to be known, which is essential for the customer experience. Data is the new crude oil, the fuel of tomorrow’s businesses. Even in a simple bus, collecting data allows to create a new business. For example, since July 2020, Transport for Londonharvest « depersonalised data » from 260 Wi-Fi-enabled Underground stations to look at flows of people travelling on the network which would be used to improve how the Tube operates and provide more information about the placement of ads, such as which areas have greater passenger football and longest dwell times.

Better service also involves the use of « down time ». And the night is one of them. Night trains should therefore be based on service, turning them into real « hotels on the move ». This means using the « loss of travel time » by interspersing it with the dead time represented by sleep. The ability of the majority of night trains to arrive at their destination, in the city centre, at around 8:00 a.m., makes it possible to avoid as many planes as possible over distances of 700 to 1,000 kilometres. Furthermore, the night train, with its cabins and compartments, is a perfect response to social distancing.

But what is highly sought after is the consistency of the ticketing. The computer systems of all transport companies are sometimes « homemade objects », with the help of outside enterprises, but whose data becomes « untranslatable » on other computer systems. Sometimes there is behind a deliberate business protection policy. But not everything depends on IT. In some countries, a child can variably be classed as under 12, under 14, under 16, according the social policies, which remain a national competency. Airlines do not concern themselves with these aspects because they are not liable for the public service and social tariffs imposed, unlike local and regional railways. Air travel is better organized thank to a global association which promote a standardized worldwide pricing system such as Amadeus or Sabre to see real-time availability and prices across operators. There is no equivalent for the rail sector, which remain a « national object ». Indeed, in the case of the railway, it must be know if a traveler ordering a local ticket is among the users who are entitled to a reduction as a permanent resident who can benefit from a social policy. Some tickets for young people, like the Belgian Go-Pass, don’t take account the nationality, but in other countries, it’s more complicated! At the technological level, with access to APIs from rail operators, “there is no standardisation of that data across Europe, and in a lot of cases it’s very hard to get access to that information,” explains Trainline CTO Mark Holt at Wired.

Other topics can still be discussed at length, but those already described above already give an idea of what awaits the railway sector. The future will be different from yesterday, competitors will not stand idly by, technology will increase and the many still reluctant passengers will have to be convinced. All this under climate objectives. In two words: challenges and opportunities.

I wish you a year 2021 full of enthusiasm and renewal.