“Shaky promise” or railway “revolution”? Kevin Speed’s announcement of the signing of an agreement with SNCF network to launch its trains in 2028 sparked contrasting reactions. The railway start-up indicated, Thursday February 29, that it had signed a framework agreement with SNCF Réseau to run twenty low-cost trains between Paris, Lille, Lyon and Strasbourg from 2028.
Kevin Speed, a French company founded in 2021 led by Laurent Fourtune, promises 16 daily passages, every hour, from 6 a.m. to 10 p.m. in both directions of three lines. This concerns the North line at the Lille Flandres, TGV Haute-Picardie and Paris Gare du Nord stations; the Eastern line at Strasbourg-Lorraine TGV, Meuse TGV1, Champagne-Ardenne TGV and Paris Gare de l’Est stations as well as the center line at Lyon Part-Dieu, Macon-Loché TGV, Le Creusot-Montceau-Montchanin TGV stations and Paris Gare de Lyon.
“I don’t see at all how they’re going to do it.”
The Minister of Transport, Patrice Vergriete, welcomed this announcement. “Kevin Speed and SNCF Réseau sign to revolutionize connections from Lille, Strasbourg and Lyon to Paris, guaranteeing service to medium-sized towns and thus improving accessibility for all citizens,” he said on X. Others are, however, more skeptical. “For the moment, there are four of them in the company. They have no train, no orders in progress, no staff, no workshop. I don’t see at all how they are going to do it”, warned on X BB27000, an anonymous train driver widely followed on this social network.
“There are few of us to be economical. We will train our drivers in authorized centers in the two years before rolling. In the short term, thanks to the agreement, we are working on financial closure to buy the trains”, replied on X Laurent Fourtune, former director of operations at Eurotunnel and former director of development at RATP.
A billion euros to find
The railway start-up estimates the necessary investments at one billion euros for the 20 trainsets, future workshops and training of train drivers, again according to Laurent Fourtune. The founding partner of the start-up hopes to complete the fundraising by this summer. But finding a billion won’t be an easy task. In July 2023, Kevin Speed announced on the BFMTV set Good Morning Business a first fundraising of 4 million euros. The young company is in any case counting on the support of BPI France, among others.
“The framework agreement is a start. The company must now complete the financial round,” Patricia Perennes, economist at the Trans-Missions firm, told L’Express. “Business plans must have an attractive side to potential financiers. It is still a risky business for them to the extent that there will be difficulties that we cannot anticipate,” emphasizes L ‘Express Alain Bonnafous, honorary professor at the University of Lyon and researcher at the Aménagement Economie Transport laboratory.
“The first difficulty that all these railway companies encounter is buying trains,” underlines Patricia Perennes. “A new TER costs at least 8 or 9 million euros. To acquire a TGV, you have to spend 30 million euros and you have to buy several. A good base is 10 or 12 trainsets in order to to have one or two in reserve”, indicates this rail transport specialist. In addition, as Alain Bonnafous points out, companies like Kevin Speed notably need to acquire a maintenance center and several “equipment which is not free”. “The real problem is the cost of entry into the sector,” he summarizes.
Too ambitious a schedule?
The schedule is one of the other constraints weighing on Kevin Speed. The little rail thumb “is committed to purchasing twenty new high-speed train sets” from the manufacturer Alstom, according to a company press release. According to BFMTV, it would be the Avelia range from Alstom. An Alstom spokesperson confirmed to AFP that the two companies were in “exclusive discussions” for the purchase of the trainsets. But no contract has yet been signed. The trains should in theory be delivered by 2028, the start date of marketing of their offers, and the tests should begin in 2026. The schedule seems difficult to keep. “It’s super ambitious, even if it’s not totally impossible to maintain,” believes Patricia Perennes.
Manufacturing times are indeed long today: it now takes almost four years to manufacture oars. For example, SNCF ordered 115 TGVs in 2018 from Alstom, the very modern TGV-M which has more seats. But the first trains, which were initially scheduled to roll in 2023, will not be delivered before 2025 at the earliest. Alstom is therefore behind schedule and has an already very full order book.
As specified it The echoes in January, Laurent Fourtune asked SNCF Réseau for guarantees of access to the lines over thirty years in order to give visibility to his investors. Without this, the project risked remaining at the dock. The framework agreement signed Thursday with SNCF Réseau covers a renewable period of ten years. If he did not get what he wanted, nevertheless, “this is good news” for him, believes Patricia Perennes, to the extent that it will “reassure the banks”.
Another point still pending, but less: Kevin Speed must still obtain the approval of the Transport Regulatory Authority. The ART, which will be contacted in the coming days, must ensure that these three lines “are complementary to those agreed by the Hauts-de-France, Grand Est, Bourgogne-Franche-Comté and Auvergne-Rhône-Alpes regions” , indicates the press release from Kevin Speed. However, this should not pose any difficulties, according to Patricia Perennes. “It will be a formality. ART is rather favorable to competition,” she specifies.
Very attractive prices
On the price side, the president of the start-up promises an offer with a price reduction as the customer purchases tickets. “The more we travel, the less we pay,” said Laurent Fourtune. “With the attack prices that we have planned, our trains will be full,” he added. The innovative rail offer proposed by Kevin Speed, called “Illisto”, starts at three euros per 100 km off-peak for trains to Strasbourg and Lille, and from five euros per 100 km off-peak for those leaving for Lyon.
The claimed model is that of low cost, more affordable. Kevin Speed, who wants to lower prices by around 30%, is inspired by “profitable solutions in the low cost air”, explains Laurent Fourtune to Echoes. Namely “very high density on board, rapid turnover of assets and reduced operating costs from secondary bases”. Clearly, the terminus of the trains will be each evening in an intermediate station, from where they will leave in the morning. The Kevin Speed trains, which will run at 300 km/h, will be different, with a single floor, more doors and “an RER-type density of people”, specified Laurent Fourtune on BFMTV last July. It will be “a train where we don’t waste time”, summed up the manager.
Patricia Perennes considers that the model proposed by Kevin Speed is “more credible” than that of Railcoop, a railway cooperative placed in receivership in October 2023, having a period of six months to find capital in order to guarantee the continuation of its activity. “Companies like Kevin Speed and Le Train (Editor’s note: a new operator which wishes to launch a regional high-speed link in the Great West and whose project is advanced) have a first merit compared to Railcoop: their business plans are based on customer demand perspectives and not on subsidy prospects for the territories served”, notes Alain Bonnafous. This cooperative had set itself the objective of launching a transverse rail link between Bordeaux and Lyon via Périgueux, Limoges, Montluçon and Roanne at the end of 2024.
However, the task still promises to be difficult for Kevin Speed. “It’s not yet won,” says Patricia Perennes. “There have been a lot of failures in this sector,” she recalls. Indeed, “it is not easy to enter the railway market: you need a real economic model, a lot of money, technically it is very complex, including the need to obtain rights of way…” , lists the economist. “It is not enough to just want to reduce costs,” adds Patricia Perennes. Many challenges will have to be faced by the young French railway company.