Report from meeting 30.1. 2018

THE FUTURE ROLE OF  NIGHT TRAINS

REPORT OF CONFERENCE   AT   EUROPEAN PARLIAMENT, BRUSSELS,  ON JANUARY 30TH 2018

60 EU citizens and decision-makers, from 10 Member States, filled Room ASP3HI of the European Parliament  hosted by the MEPs Lucy Anderson and Jakop Dalunde.

Welcoming the participants, Lucy Anderson MEP looked forward to a positive and constructive event. She also referred to a consultants’ report in May 2017 which had not been optimistic  about the future of night services and she questioned whether those who had commissioned it were genuinely independent.

Poul Kattler, Coordinator of Back-on-Track, said the network had 170 members, ranging from individuals to large associations, plus 1000 supporters on its facebook page. They believed that night trains should supplement daytime services and wanted to encourage the industry  to be innovative, while the European Union must make it financially and legally easier to run night trains.

The Back-on-Track network was in favour of all rail passenger operators – whether public or private sector – who were willing to operate night services.

Mr Kurt Bauer, Head of the Long-distance Passenger Department of OeBB (Austrian Federal Railways) explained that his company was now the largest state operator of night trains in the EU.

Austria had traditionally  had a strong night train sector, partly for reasons of geography; and when the neighbouring German operator, Deutsche Bahn, announced plans  to close its City Night Line services, OeBB looked at the potential for night trains to and in Germany and created the brand “Nightjet”.

Mr Bauer emphasised the importance of economies of scale – “We already had a network and we added to it.”  It was much more difficult for a night train operator to start from nothing. The first international night train was expensive to run, because infrastructure needed to be built up, but the second and subsequent trains could be run at marginal cost.

Nightjet bookings normally opened 6 months in advance and included competitive prices for family compartments. The tourism sector was important, while OeBB had a social responsibility for providing long-distance transport and in remoter areas, in particular, the seated section of the Nightjet was often important in providing commuters with the first or last connection of the day.

Our speaker stressed the need for “reasonable infrastructure charges”, pointing out that a night passenger train   was less time-critical than a fast daytime train – indeed, in some respects, its requirements were similar to those of a freight train. They should at least receive equal financial treatment to that given to competing modes – for example where Value Added Tax was concerned; while he described the 1944 agreement exempting airlines from kerosene tax as “totally inappropriate in today’s circumstances.”

Many night trains could run commercially, but a small subsidy might be needed for some cross-border services. Mr Bauer also suggested that the EU could help in co-financing new vehicles and in a Europe-wide promotional campaign for such international links.

He concluded by saying, “The night train   will never be the fastest and cheapest way to your destination, but it makes the way to your vacation part of your vacation.”

The second speaker, Dr Libor Lochman,  Executive Director of the Community of European Railways, spokes of the challenges and opportunities for night trains.

The general challenges  were chronic under-investment,  technical barriers (not enough interoperable vehicles) and an insufficient level playing field between rail, road and air.

The distanced-based infrastructure charging used on all of the rail network should also be applied, through tolls, to major roads.

Dr Lochman also identified specific challenges to night trains. The market had been declining for many years, partly because of competition from low-cost airlines and international coach services.  Most services were expected to operate commercially and did so. The rail network was increasingly congested as must be used as efficiently as possible. This meant many freight services operated at night.  Night trains arrived in major cities during the morning commuter peak when major stations were of course very busy. The cost of specific rolling stock was also a challenge.

Our speaker   set out four conditions for improvement;

  1. Night trains must be organised to meet customer needs, and OeBB was doing this.
  2. Public Service Obligations should be considered for certain night trains which fulfilled a social role.
  3. The infrastructure must be well maintained and run efficiently; and there could be a role for the EU’s Connecting Europe Facility for cross-border links in this respect.
  4. Intermodal competition could help, provided that it was on a level playing field.

 

The third speaker  was from the European Commission.  Mr Marcin Wojcik,  Senior Policy Officer at DGMOVE C3 , Single European Rail Area Unit  reported that the European Commission had received many questions from the European Parliament and letters from citizens expressing concern about the future of night trains.

He stressed that providing rail services was not an EC competence and that operators, governments and regional authorities must consider costs, demand and the type and quality of service offered.

The objective of a night service was not to reach the destination   as quickly as possible, but to do so within a given time slot.

The EC had provided a legislative framework to ensure that track access charges were, as a rule, kept relatively low – Article 31(3) of the recent Directive 2012/34. The charge should be set at the cost  directly incurred as a result of operating the service.

This Directive also enabled Member States to levy mark-ups in order to obtain full recovery of the costs of freight and passenger services using the infrastructure.

The framework enabled Member States to modulate access charges in favour of services (including night trains) which they considered important. They could also award public service contracts and cover some of the costs if, in their view, there was a societal need. They could also do this in co-ordination with neighbouring authorities.

In conclusion, Mr Wojcik   suggested that the 4th Railway Package “may help generate more demand for rail services and as such  improve the business case for overnight trains.”  There are some market niches possible including downscaling the offer for price-sensitive customers (e.g. normal carriages with only basic seating accommodation) or upscaling (sleeping cars with en suite facilities) to meet business requirements.  Furthermore, with a “greying society”, citizens   who might not wish, or be allowed, to fly and might prefer to use a night train.

 

In questions and discussion  it was argued that all rail companies should be able to book each other’s trains and that it must be possible to reserve places for bicycles as well. Indeed, the 4th Railway Package stipulated easier through ticketing.

OeBB received public funding  for the part of the Nightjet route on Austrian territory, the outside Austria the trains were run purely commercially. At present their staff only operated within German-speaking areas. Nightjet tickets would soon be available on TrainLine as well.

The EC and European Parliament were working on a framework which would make it easier for operators to start new services.

 

Mr Jakop Dalunde MEP chaired the second half of the conference, recalling how he had often found night trains useful when travelling between Sweden and other European countries.

Mr Jens Rohde MEP  also said that he used to travel regularly by night train between Denmark and the European Parliament in Brussels and Strasbourg. He considered that a “change in mindset” was needed by the European Commission.

“We have to invest in railways,” he continued, suggesting taking part of the structural funds for this purpose and concluding, “It’s all about will.”

Mr Sven Gossel stated that “profitability in long-distance train services is a mere fact” and added that the rail industry could learn from what the airline industry had done in terms of marketing and sales over the past 25 years. Some challenges were comparable – for example, large airports and large stations both suffered from congestion.

Track charges needed to be competitive, both for day and night trains, while long-distance commercially operated coaches must also be charged tolls.

The market power of incumbents was currently too great, which was why private companies were mainly running trains in freight or niche markets. A 5th Railway Package was needed as the recently agreed 4th Package did not tackle all the real issues.

Mr Gossel proposed the immediate privatisation of all long-distance train operators, and clear separation   between long-distance  running on open access principles, and regional services operating mainly on publicly ordered rail markets.

By 2030 there should be harmonisation  of signalling and coupling, and he urged the creation of a European Rail Transport Operating Agency to co-ordinate long-distance slots and track charging and to enforce network improvements where needed.

He suggested that infrastructure managers should implement the policies of this Agency; major stations should operate as independent companies and tickets should be displayed and sold in a non-disciminatory manner. Timetables should change twice a year, in November and April, as happened in the airline industry.

In answer to a question, Mr Gossel  said that his company, Trans Metropolitan, planned to run three long-distance services by 2020.

 

In general discussion, some participants stated, “liberalisation has failed” and were sceptical about the comparison between airlines and railways, emphasising the network benefits of the latter. It was also contended that track charges were sometimes too high because the railways did not want particular traffic.

Problems in northern Sweden were described, where the night train operator only had a contract for 4 years and had no   incentive to invest in new rolling stock. The solution could be a Europe-wide rolling stock pool.

It was pointed out that new entrants in the Czech Republic and Slovakia were successfully running cross-border trains.

On the other hand, it was suggested that “competition alone will not solve all the problems” and that there had to be a sensible mix of competition and co-operation, and that it was possible to have liberalisation and regulation together.

The representative of the   Commission stated   that it was the role of the market or the respective competent authorities to provide night trains. In that case, it was up to supporters of night trains to press for changes to the market conditions.

Independent ticket vendors had the technology to put together through tickets, but state incumbents were sometimes reluctant to provide data.

Mr Bauer said that Nightjet had the full support of OeBB management and staff. If the business evolved, the might be new services, “but our core business is to serve Austria as we are a state operator.”Finding extra rolling stock also remained a challenge.

In conclusion,  Mr Dalunde asked the guest speakers to name one thing they would do and/or make one request.

Mr Gossel urged the EC to ensure there was enough investment in infrastructure.

Mr Bauer promised to co-operate with Mr Gossel and said that within a year it would be easier to buy Nightjet tickets.

Dr Lochman urged the EC to take steps to help the railways become more competitive with other modes of transport.

Mr Wojcik would ensure that the legal framework was implemented and urged the rail sector to address the ticketing issue, or else the EC would itself take action.

 

Trevor Garrod, as one of the conference organisers, thanked the MEPs and their assistants, the guest speakers and all participants for their input. Back-on-Track would issue a report of the conference and list on its website key points for customers and decision-makers The powerpoint presentations should also be available there shortly.

TG   7/2/2018