Second episode of the arrival of Renfe in France. After the opening of the Lyon-Barcelona line in mid-July, a train from the Spanish railway company linked Marseille to Madrid for the first time this Friday, July 28. Arnaud Aymé, transport specialist for the firm Sia Partners, believes that these announcements are only the first steps for Renfe on the French market.
L’Express: Renfe launched its new Marseille-Barcelona-Madrid link this Friday, July 28, after having inaugurated the Lyon-Barcelona line at the beginning of the month. What does this new market entry mean for SNCF?
Arnaud Ayme: Renfe will not overshadow SNCF by setting up on the Marseille-Madrid line. This line is not particularly attractive because it does not correspond to a large market. To understand why Renfe is positioning itself on this route, we have to go back. Until December 2022, SNCF and Renfe were linked in the Elipsos joint venture, which operated three routes: Paris-Barcelona, Lyon-Barcelona and Marseille-Madrid. However, the atmosphere had changed since the launch by the SNCF of Ouigo Spain in 2021. In addition, the cooperation was called into question, because overall in deficit. It ended with a breakdown of the partnership between the two actors. SNCF managed to quickly take over Paris-Barcelona, while Renfe needed more time to do the same with the other two. It wanted to maintain these connections to get to know the French market better with a view to positioning itself on high traffic lines, typically Paris-Lyon. Renfe hopes to open a link on this section before the 2024 Olympic Games: the impact of this decision will be much stronger for SNCF. Renfe will then become a very serious competitor, because Spain is one of the world champions of high-speed lines.
How do you see the opening up to competition for the SNCF?
This is necessarily a subject of concern and a threat for the SNCF on its domestic market, France. But opening up to competition in Europe is also an opportunity, as evidenced by its offensive in Spain. On the TER market, the SNCF thinks it can win and history has rather tended to prove it right. It is certain that the company will lose market share in France since it was in a monopoly situation, but if it manages to lower its base of fixed costs so as not to be in the red, it is able to draw its pin of the game. Moreover, it can expect growth in the size of the entire rail market.
Are the issues different between high-speed lines and regional transport?
The two markets have nothing to do. The barriers to entry are much higher on high-speed lines: to penetrate this market, you have to be able to acquire trains at more than 30 million euros each! Ditto for the other long-distance lines, which explains why players such as Railcoop encounter so many difficulties in establishing themselves on the market… As for the TER and Transilien, they are based on a model of public service delegation, with equipment made available by the Regional Council. The cost of entry is therefore lower, which makes the competition much more intense. The SNCF has to deal with the national operators of other countries, such as the German Deutsche Bahn, but above all with the world champions of public transport which turn out to be French, namely Transdev and RATPDev – Keolis being attached to the SNCF. It thus lost the Marseille-Nice TER line to Transdev, but it won others, recently in Pays-de-la-Loire.
What does opening up to competition mean for users?
For TER, this will not change anything because the prices are set by the Regional Councils. Regarding the TGV, it is difficult to imagine a massive drop in prices due to the cost of tolls. To circulate in France, all operators must pay a significant fee, while States such as Italy and Germany have chosen to largely subsidize the construction and maintenance of railways. Reduced to the kilometre, the tolls are thus twice as high in France as in Italy and Spain. This explains in passing that the competition is very timid in France, whereas it has existed for ten years in Italy. To come back to the price of the ticket, do not expect a price war because of these enormous fixed costs which weigh on the railway. The positive point remains that the arrival of competitors will increase the number of trains in circulation in France and therefore the number of places available, and thus the ceiling prices will be reached less often.
Freight was the first activity opened up to competition in France in 2006. However, the fate of SNCF Fret is unenviable. Should we fear the same thing for the activity dedicated to passenger transport?
The liberalization of the market does not change its fundamentals. However, rail freight has been sick for fifty years due to the deindustrialization of France and the poor state of the infrastructure. Finally, it suffers from the strong competition from the road in France, unlike Switzerland which has chosen to tax trucks. This was also the ambition of the heavy goods vehicle ecotax, which was abandoned by political cowardice in 2014. The rail freight crisis therefore does not date from its liberalization.
A study published by Greenpeace concludes that the train, encouraged to ensure the decarbonization of transport, costs twice as much as the plane in Europe: how do you explain it?
This study poses a problem for me because of the examples used. Rail operators are not looking to gain market share over very long distances, but of course routes of less than 1,000 kilometres. So not on London-Barcelona or Paris-Valence! In this case, obviously the costs will be higher for the train, given the multiplication of the number of rail tolls that operators will have to pay, while the use of the sky is almost free.
This is therefore proof that there is a distortion of competition between the plane and the train…
I do not know if it is possible to speak of a distortion of competition insofar as the sky is not an infrastructure built by human beings. This being so, one can wonder about the use of a free sky… On the other hand, if one puts into perspective two fields which are comparable, namely rail and road, one indeed notes a strong distortion in France between the road, the maintenance of which is paid for by the State and the local authorities, and not by the users, unlike rail.