European Rail Industry Struggles with Severe Covid-19 Impact, Passenger Revenues Plummet to Half of Pre-Crisis Levels

Posted on 05 May 2021

The impact of the ongoing Covid-19 pandemic on the European rail industry remains severe, causing passenger revenues to languish at only half of their pre-crisis levels. This concerning revelation was brought to light by the latest 'Covid Impact Tracker,' a comprehensive study conducted by the esteemed Community of European Railway and Infrastructure Companies (CER) in April. In addition to shedding light on the plight of passenger services, the study also delved into the consequences faced by infrastructure managers, uncovering a disheartening decrease of over 10 per cent since the onset of this year.

Regrettably, the year 2021 has proven to be even more arduous for the rail sector compared to the entirety of 2020. Financial losses for rail passenger services have surged by 10 per cent, exacerbating the already dire situation. Although a glimmer of hope flickered during the summer of 2020, when passenger losses momentarily eased, the situation began to deteriorate rapidly in October of the same year. By November 2020, the losses had reached a staggering -51 per cent when compared to the corresponding period in 2019. The distressing aspect is that this level of losses persisted for the subsequent four months until March 2021, creating a sustained period of hardship. As a result, the weekly losses have amounted to nearly 600 million euros per week across the 27 EU countries.

Armed with these disconcerting findings regarding the relentless impact of the pandemic, CER has issued an urgent call for financial support, recognizing that targeted assistance to the railways is absolutely essential to alleviate the profound negative effects of Covid-19. Such support is deemed crucial not only for the sector's recovery but also for its future growth prospects.

The study also turned its attention to the realm of rail infrastructure, uncovering crucial insights during its maiden analysis in April 2021. The findings revealed a significant 13 per cent decrease in revenue for infrastructure managers since the dawn of this year. What makes this decline even more disheartening is that the losses incurred during the first quarter of 2021 nearly mirror the magnitude witnessed during the initial stages of the coronavirus crisis in the first half of 2020. While the study identified multiple reasons contributing to these losses, their respective weights have not yet been ascertained, leaving room for further investigation and analysis.

Highlighting the importance of the rail industry in achieving the objectives set forth by the European Green Deal, Alberto Mazzola, the Executive Director of CER, stressed the pivotal role that railways must play in both the recovery of the European economy and its transition toward sustainability. However, Mazzola emphasised the dire need to ensure that the sector emerges from this unprecedented crisis with ample strength to fulfil its pivotal role effectively. To this end, Mazzola underscored the indispensability of providing substantial compensation for the current losses experienced by the industry. Moreover, he called for the reduction of charges imposed on operators, while also compensating infrastructure managers for the revenue they have lost, all of which are essential steps to assist the sector in navigating through this challenging period successfully.

While rail freight has experienced significant losses as well, albeit to a lesser extent than passenger services, the situation remains concerning. Following a relatively normal month in December 2020, freight revenues plummeted by -10 per cent in January, March, and April, underscoring the strain faced by this vital sector. The gravity of the situation was further accentuated when revenue loss reached an alarming 11 per cent in February. CER figures demonstrate that the average weekly losses in March surpassed 30 million euros, underscoring the urgent need for attention and support in this segment as well.

The European rail industry continues to grapple with the severe ramifications of the Covid-19 pandemic.

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