Ordinary weekend in the main hall of the Gare de Lyon in Paris. A horde of executives in a hurry to escape for the weekend slalom between a compact crowd, jostling a few retirees as they pass, looking a little lost, their gaze fixed on the gigantic billboard. Further away, young parents, exhausted, pull heavy suitcases, straddled by tired toddlers. In a corner, a man bends over the keyboard of a self-service piano playing an old Aznavour hit. On the platforms, behind the control barriers, three blue, white and red “pointed noses”, stuck side by side, swallow and spit out their passengers. High-speed trains, in SNCF language: an azure Ouigo pressed against a whitish TGV Inoui which makes eyes at a crimson Frecciarossa from the Italian company Trenitalia. A summary of the revolution which is just beginning on the French railway market and is shaking up the SNCF, its habits, its employees, its territory.
For the 150,000 railway workers, opening up to competition has long been synonymous with dangerous terra incognita. Energy, telecoms and air transport had nevertheless moved there, allowing in most cases the emergence of new services and, above all, spectacular price reductions. But not the train. The European directive detailing the framework for the opening of the European market dates back to 1991. Four railway packages, the last of which dates from 2006, have detailed in detail the contours of this liberalization dear to the Brussels Commission. Germany, Spain, Italy, not to mention the United Kingdom took the plunge but France dragged its feet for years. “I participated in the writing of three of the four rail packages. Each time, whatever his political color, the French Minister of Transport praised in Brussels the benefits to radically change his discourse when he crossed the border” , observes Gilles Savary, member of the High Committee for the Rail Transport System.
The two faces of the SNCF
In fact, although the market is now open, the reality of competition is still barely visible to the general public. Only five Frecciarossas travel daily between the capital and Lyon. “A handle should connect Marseille from next summer if all goes well. The opening of the French market is slow, we are losing money but that is completely normal at the start,” comments Marco cautiously. Caposciutti, the French president of the Italian company. Its Spanish competitor Renfe attacked the south of France with a Barcelona-Lyon and a Marseille-Madrid, but it was forced to delay the arrival of its trains in Paris. As for the French Transdev, it won the first regional call for tenders launched by the Paca region and will operate the Marseille-Toulon-Nice line in the coming months. A timid but inevitable opening of the market.
The SNCF is not discovering competition today. Very early on, under the leadership of former president Guillaume Pepy, the company set out to attack abroad, taking away lines from firmly established national companies. Abroad now represents almost 30% of the group’s turnover and a little more than half of its profit. And the conquest is not over. “We are awaiting in the coming days the result of a call for tenders for the construction and operation of a TGV line in Canada, a very large contract,” breathes Jean-Pierre Farandou, the boss. A particularly aggressive SNCF on prices. In Spain, since the arrival of new players in 2021 and in particular Ouigo, prices have fallen by almost 40% on the lines concerned, reveals the Transport Regulatory Authority in its latest annual report. So much so that Renfe is getting annoyed. “We have launched an investigation into the practices of SNCF in Spain for unfair competition so that the European Commission can determine whether or not there is reason to actually file an appeal,” explains Sara Hernandez Garcia, one of the spokespersons. of the Iberian company.
Mix of genres
Offensive abroad but defensive in France, these are the two faces of the SNCF. The arrival of new players in France has also been prepared for a long time. In 2013, it launched its low-cost Ouigo offer. “There was the desire to have popular high speed, and then we knew that this would make it possible to better resist competition,” confirms Tanguy Cotte-Martinon, general secretary of SNCF Voyageurs. A profitable bet. “The company saturated the market by capturing segments that could have been exploited by competitors. This strategy, although legitimate, limited the available niches,” says Arnaud Aymé, Managing Director France of Sia Partners. With Ouigo, SNCF now covers all the “profitable” lines on which other operators logically position themselves.
“The rail network was designed by the SNCF and for the SNCF,” maintains Alexandre Gallo, the president of Afra, an association bringing together alternative operators. To welcome new entrants, it was necessary to unravel the group, creating subsidiaries theoretically independent of each other but still overseen by the leading public holding company. Sometimes the walls are porous. The process of allocating the famous train paths – time slots – has been carried out since 2020 under the aegis of SNCF Réseau, the infrastructure manager. A 100% subsidiary of SNCF… Just like its sister company, SNCF Voyageurs, responsible for operating the group’s trains and therefore in competition with Trenitalia and Renfe.
A mix of genres that clashes. “This system is not healthy,” judges centrist senator Hervé Maurey. Although it found nothing illegal in a recent report, the Transport Regulatory Authority considers that certain mechanisms in place, such as the competition fund, where part of the profits of SNCF Voyageurs contribute to the regeneration of the network, can sow doubt. “The choice of an integrated model between SNCF Réseau and SNCF Voyageurs requires governance safeguards to guarantee neutrality and avoid conflicts of interest,” adds the president of the Competition Authority, Benoît Cœuré. At SNCF Réseau, we ensure we take advantage of opening up to competition. “The more operators there are, the more we will be able to obtain additional tolls, which will allow us to better maintain the networks,” says Hélène Vasseur, marketing and regulation director within the subsidiary.
An obstacle course for new entrants
To access the French rail network, however, you have to elbow your way and be patient. The allocation of train paths is carried out annually and little by little. “The possibilities of increasing their number are limited due to the current size of the market,” points out economist Marc Ivaldi. The manager does not do everything possible to speed up the process. But mentalities are changing. “We are not talking about competitors but about customers,” assures Raphaël Poli, deputy general director of Gares et Connexions.
Each train running in France must also have the KVB signaling system. Manufactured by Alstom, this safety equipment has not been sold for several years… and SNCF Voyageurs has purchased the remaining stocks. If a relaunch of the production line is normally planned for 2024, the new operators must, in the meantime, rent them from the subsidiary. A European signaling system, called ERTMS, is currently being deployed, but its installation costs nearly 500 million euros per year and is being done at a slow pace. “We are behind on the European objectives, which were nevertheless extremely ambitious,” says the office of François Durovray, the Minister of Transport. As a result, the final rendering is not expected before 2044, at best.
The technical difficulties do not end there. As in aeronautics, there are no train rental companies. Only ordering from a manufacturer or purchasing used equipment is possible. At the beginning of the 2010s, anticipating a drop in ridership on its lines, the SNCF destroyed several of its trains which could have been refurbished. “Why did she send them to the scrapyard instead of selling them?” asks economist Patricia Pérennes. When an operator manages to get their hands on the rare bird, a long process of rehabilitation begins. In 2022, the Railcoop company, which wanted to relaunch the Bordeaux-Lyon line, acquired two trainsets from SNCF Voyageurs which required a good makeover. Alstom, manufacturer of the model, was then contacted, before moving on. “They came to see the equipment. But they ended up telling us: ‘our main customer is the SNCF and brings us several billion euros, we prefer not to support you'”, relates Nicolas Debaisieux, the former director of this actor who finally threw in the towel last April. The obstacle course continues.
When a company has finally managed to find trains in good condition, they must still be approved and certified to run on French rails. Here again, the affair turns tragicomic. It is indeed an independent agency – the Public Railway Safety Establishment – which gives its approval but on the basis of tests carried out by two companies – the Material Engineering Center and the Railway Testing Agency – subsidiaries , they too, from the SNCF. A very French specificity. In Spain, the management of railway infrastructure is the responsibility of the Administrador de infraestructuras ferroviarias, a separate company from Renfe. And the Iberian company does not intervene either in the approval of foreign candidates, nor in the assignment of slots. Finally, there remains the sale of tickets. SNCF Connect, owned by SNCF Voyageurs, alone holds 85% market share in the train ticket distribution segment. Trenitalia knocked on the platform’s door, without success. “We do not necessarily have an interest in being present on SNCF Connect because that would mean, in effect, entrusting a large part of our turnover to our main competitor,” puts Marco Caposciutti into perspective.
Meanwhile, the money is going fast. “To enter the market, you need at least 1 billion euros,” warns Patricia Pérennes. With financial benefits that will not be expected for several years. Midnight Trains with its rail hotel, Railcoop… Several start-ups have already failed. Only Proxima, created by Rachel Picard, a former SNCF employee who led the Ouigo revolution, recently raised 1.2 billion euros. The amount needed to attack the high-speed lines in western France. Kevin Speed, another young shoot, is still refining his round of financing. On its Olympus, the SNCF has time on its side. At least, she thinks so.
.