Trenitalia, a company that looks at Europe and the world

(photo nimame via wikipedia)

02/15/2021 – By Frédéric de Kemmeter – Railway signalling
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It is an observation of the author of this text: the railway remains a very national domain, even in the specialised medias. As a result, railway aficionados, whatever their level of involvement, have no idea what is being done abroad. This is therefore an opportunity to go away its borders and to see what is being done elsewhere, with for example the Italian public operator Trenitalia.

Trenitalia is a subsidiary of Ferrovie dello Stato Italiane’ group (FS), an holding owned by the Italian government. Company was created on 1 June 2000 as the primary Italian rail transportation company while Rete Ferroviaria Italiana (RFI) was established as a railway infrastructure manager.

In order to increase its turnover, internationalisation has become the new path for the state-owned FS group which, after revolutionising the lives of Italians with its high-speed train, is now exporting its technical and commercial know-how to other European and non-European railway markets.

If we know more about the « Trenitalia » brand, it is because this operator operates in the « Travellers » segment. The other sector, « Freight », was completely restructured in 2017 to create Mercitalia Logistic. In fact, the international activities of the Italian group go back longer. The internationalisation of the FS group accelerated sharply from 2010 with several initiatives in foreign countries. This is what this brief overview proposes.

The TRAXX 185 408-2 from TX Logistics at Gremberg marshalling yard, in 2015 (photo Rolf Heinrich via wikipedia)

TX Logistik
Founded in 1999 in Germany, the private rail freight company TX Logistics was already 15% owned by Trenitalia in 2003, 51% in 2005 and 100% in 2011. All TX subsidiaries abroad also came under the Italian umbrella. The head office is now located in Verona. This is a major acquisition for the Italian railway group since this company of 500 people, including 160 drivers, operates nearly 18,500 freight trains internationally every year, i.e. 50 per day.

Frecciarossa 1000 arriving at Milan-Centrale station, near a Thello to Nice, in 2017 (photo Mediarail.be)

Thello
Thello was born out of the break-up of the Artesia cooperation in 2010, when the SNCF announced that it wanted to become a shareholder in Trenitalia’s future competitor, NTV-Italo. The reasons for the break could also have other, more obscure arguments related to the vision of international traffic and its costs. With the SNCF abandoning the four night trains between Paris and Italy, it was Trenitalia, via a joint venture with Transdev, that resumed the service, based on a single Paris-Milan-Venice night train with an estimated 300,000 passengers a year. On 14 December 2014 Thello launched a daytime service with three trains between Milan-Centrale and Nice, including one extended to Marseille-Saint-Charles. At that time, Thello was to be the « Italian international brand » for passenger transport. However, it would seem that these services had never reached equilibrium and in 2020, the pandemic put all Thello’s activities on hold, although the brand is still relevant.

Alstom Coradia Continental from Enno, at station Hannover, part of the Netinera group (photo Clic via wikipedia)

Netinera
Netinera is unknown outside… Germany. It is indeed an acquisition in 2011 of the German division of Arriva Deutschland, bought from Deutsche Bahn with the support of Luxembourg funds Cube Transport. Netinera, which is already a group, is present in 13 railway companies and 4 bus companies in Germany. In 2019, Netinera was the number 3 of German local railway companies with 5.5% of the market (see at this link). Since November 2020, Netinera has been 100% owned by Trenitalia.

The Netinera group (Netinera website)

Then there was a pause with acquisitions abroad. From April 2012, Trenitalia was confronted on Italian ground with a new competitor in the high-speed segment. It tried to oust him by multiple obstacles but the arrival of a strong regulator in 2013 put things back in order. Around 2015-2016, Trenitalia noted that its competitor had not reduced its clientele but, on the contrary, had even increased it! Indeed, Trenitalia believed that the « new clientele » brought in by its competitor came from a public that had never taken the train. By travelling with NTV-Italo, firstly because lower prices, this public also discovered the large renovated stations (as well as the shops in these stations) and noticed the modernity of the trains… of Trenitalia. This is why Italians are fervent defenders of their competitive model.

2017 was a great year for the FS group with a wave of offensives all over Europe.

TrainOSE (photo stolbovsky via wikipedia)

Greece
Since January 2017, the Greek state-owned company TrainOSE is part of Trenitalia following its privatisation. This operator is also active in freight transport and manages all the railway lines in Greece. This is probably a unique case in the world where an entire country depends on a state-owned company from another state (with the exception of Monaco and Liechtenstein). TrainOSE, the name of the Greek rail operator, had 672 employees at the time and operated around 350 trains per day. By way of comparison, TrainOSE is very much smaller than the German Netinera group. FS Italiane acquired full ownership of TrainOSE at a bilateral Italy-Greece summit in Corfu in September 2017, following an authorisation procedure and the green light from the European Union.

A c2c trainset class 357 Electrostar from Bombardier (photo superalbes via wikipedia)

Great Britain
In February 2017, Trenitalia UK acquired NXET (c2c brand) from National Express, a company that operated the « Essex Thameside » franchise which linking London Fenchurch Street to South Essex. The acquisition was part of National Express’ drive to withdraw completely from the UK rail market and to operate train services elsewhere in Europe. National Express had been operating this franchise since 2000, and a 15-year renewal was signed in 2014. c2c is one of the few franchises to have enjoyed a positive rating in the UK, as on 11 October 2018 it received the award for ‘UK Railway Company of the Year’ at the 18th National Transport Awards, at a time when the franchise system itself was beginning to raise serious questions.

It seems that Trenitalia was boosted by this operation since in the summer of 2019, the Italian group joined forces (30%) with First Group to take over the very lucrative West Coast franchise from Virgin, an emblematic line linking London to Birmingham, Manchester and Glasgow. But this acquisition of a stake in the new « West Coast Partnership » franchise, now operating under the « Avanti » brand, also includes the operation of services on the new high-speed (HS2) London – Birmingham (160 km) line, supposedly scheduled for 2026, but most likely later. But who knows more about high-speed competition than Trenitalia?

Avanti trainset class 395 at Lancaster (photo Peter Trimming via geograph.org.uk)

Indeed, in addition to its « old » ETR500, Trenitalia has been operating the ETR1000 high-speed train designed by Bombardier and Hitachi (since the acquisition of Ansado-Breda) since 2015, based on Zefiro’s experience in China. A train that is doing very well and has become the Italian group’s major asset for presenting itself on foreign markets. But since Bombardier was bought out by Alstom, the European Commission had asked to get rid of the high speed segment, a wish easily fulfilled since Alstom only swears by his French-designed TGV. The Zefiro was therefore transferred to partner Hitachi Rail, which can now offer rolling stock that has already been studied and has solid experience in Italy. Will it be the train on the HS2? That has yet to be decided, but it should be noted that Hitachi Rail has a strong presence in both Great Britain and Italy. This can help…

Spain
The good performance of the Frecciarossa 1000 and the experience of the competition in Italy motivated Trenitalia to accede to the request of the Spanish Air Nostrum airliner to participate in the implementation of the ILSA operator and to obtain the « package B » of the Spanish liberalisation. Although the other two competitors, Renfe and Rielfstera (SNCF), could start operating in 2021, ILSA will begin operations at the end of 2022 when Hitachi Rail’s Zefiro high-speed trains are homologated. The 23 new trains for ILSA will be designed and built by Hitachi Rail and Bombardier in Italy. Each train will be approximately 200m-long with capacity for around 460 passengers and capable of commercial speeds of up to 360km/h. Thus, before Great Britain, Trenitalia and Hitachi Rail will be able to test the Zefiro / Frecciarossa 1000 on a foreign network and get the full experience before going on the HS2, or even elsewhere!

USA?
The american mobility market (mass passenger transport, high speed trains and freight) does offer interesting growth possibilities, especially in the large metropolitan areas, thanks to an increase in investment in railways – which has doubled over the past thirty years – and the increasingly frequent use of large, international professional operators to provide transport public services.

On 13 may 2019, FS Italian Railways USA Inc. was established as a joint stock company under US law whose line of business is the management and development of transportation – and related work – in the North American market. The company’s mission includes taking part in tenders organized in that market, with the aim of also exporting the FS Group’s know-how to North America and ensuring growth of international turnover in line with the goals of the fs group’s and FS International’s 2019-2023 Industrial plan.

There are few people who could have bet some twenty years ago on such dynamism on the part of the Italian public operator. With Trenitalia, FS Italiane intends to consolidate its leadership in rail transport in Europe, now considered to be the domestic market of reference, in view of the liberalization of the European market permitted with the fourth railway package, exporting the excellence and leadership of Italian high speed. The Group led by Gianfranco Battisti now looks beyond Europe and aims to export best practices in railway engineering and technology to non-European markets, also through partnerships with private operators. The railway sector in Italy is no longer a national business, but a global business…

(photo Trenitalia)

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