EU rail operators set to shake up travel business

Europe’s rail operators look increasingly set to shake up the region’s travel business, and challenge Europe’s Low Cost Carriers. We believe that the powerful combination of liberalised markets, improved high speed rail technology, and ubiquitous broadband and more effective distribution technology will mean that train will increasingly replace plane as many European’s preferred method of travel over short and medium haul journeys.

Eurostar, for instance have recently launched a direct service from King’s Cross St Pancras International to Avignon over the summer. Though it’s currently only set to run once a week, it certainly made me think twice about taking the car for our family holiday in France this summer. A 5.5 hour train journey would beat a two day drive hands down (especially with two children aged 5 and 7 in the back seat). In the end we’ve chosen the car (mainly because we need a vehicle while we’re there, and it’s hard to put much wine on the train).

This certainly was highlighted at the Rail Revenue & Customer Management Conference last November and this year’s meeting seems set to shine the spotlight on it even more. The other new dynamic challenging the status quo is how new technology is allowing start ups such as WESTbahn GmbH and the Hamburg-Koln-Express GmbH to challenge Austria’s OBB and Germany’s mighty Deutsche Bahn respectively on their home ground. I certainly look forward to hearing how these two challenger brands are tackling the incumbent operators using new and innovative distribution technology and customer service offerings.

We’ll be looking in future at key success factors that will enable Europe’s operators to meaningfully take market share from Low Cost Carriers (or indeed to grow the size of the market, as was the experience with the launch of Eurostar’s London-Paris service).