Trends on the tracks

Much has been made of rail travel’s ability to win marketshare off airlines as business travel recovers, but is it playing out as predicted?

With domestic business travel leading the comeback, it’s to be expected that rail travel will rebound before air. And while there is undoubtedly data to support this, demand is perhaps creeping up slower than initially thought.

UK rail passengers are returning, albeit slowly, with data from the Department for Transport showing private car use is more or less back to pre-Covid levels while rail’s return languishes some way behind at around 35 per cent of ‘normal’ levels.

Rail’s fortunes vary across Europe. Arriva, which operates services in countries across the continent, says its passenger numbers are now at “near-normal levels” in Denmark but only at 50 per cent in the Netherlands.

“The industry needs to tackle head-on the risk that people will revert back to private car usage, with some perceiving this as a safer alternative,” says Liz Benison, Arriva managing director, mainland Europe.

Compare rail with air travel, though, and it’s a different story. Before the pandemic, TravelPerk processed approximately two flights bookings for every train journey in Germany (with a ratio of four to one Europe-wide) but that has “been turned on its head” with rail bookings in June four times the number of flights.

“The shift might level out again as air travel recovers, but it will be slow. Moreover, rail travel’s benefits continue to gain strength,” says TravelPerk CEO and co-founder Avi Meir.

“Not only is rail the more sustainable option, but it is also more convenient in many cases, transporting passengers between city centres across Europe. New health and safety measures at airports could also strip away air travel’s
efficiency benefits.”

He adds: “I suspect a result of the pandemic will be that many travellers realise that rail is a good alternative, especially for shorter routes.”

Raj Sachdave, managing partner at Black Box Partnerships, believes not only that rail will benefit overall, but also that the pace of business travel in general will slow down.

“Long-distance rail travel in Europe is particularly going to be a winner,” he says. “The airport experience right now and the inconsistency across airports plays into rail’s hands. What gives a traveller confidence is consistency – never more so than now. There are fewer touch points and far fewer people in one place with rail travel. You can relax, you can work.

“Business travel is not going to be as fast-paced for a while. People are going to be really looking after their travellers. The sustainability aspect is a big factor too.”

THE GREEN CASE
Rail travel is regularly lauded as being more environmentally friendly than air travel, although the two are notoriously difficult to compare. The common yardstick in attempts to measure environmental impact is emissions per passenger per km travelled, but there are hundreds of variables to account for: passenger loads, engine types, fuel use, altitude flown...

Even so, the case for rail travel being the greener form of transport is almost undisputable and its adoption for corporate and leisure travel is growing. The concept of flygskam, or flightshaming, was already gaining traction pre-Covid, with rail travel winning marketshare off airlines across Northern Europe as the populace showed a desire to ‘do the right thing’ and favour rail over air.

Identifying an opportunity to make rail travel core to the post-pandemic return of both leisure and business travel, the UK’s Rail Delivery Group – which represents train operators – launched a campaign in August to “make polluters pay their fare share”.  RDG wants transport levies to reflect how damaging a mode of transport is to the environment.

Citing government data, it says a one-way flight between London and Edinburgh emits the same amount of carbon as three return rail journeys between the two cities.

The group proposes that taxes are increased on air routes that are in direct competition with trains and reduce prices for long-distance rail fares. “This would incentivise people to make greener choices when travelling in Britain or to international destinations that are easily reachable by rail such as Paris or Amsterdam,” says RDG.

Competition between rail and air was also thrust into the spotlight in France this summer when sustainability advocates were quick to highlight the government’s bailout of Air France came with certain conditions around not competing with SNCF on domestic routes; others also noted the French government’s interests in the train operator.

“The bailout definitely gives a stamp of endorsement to rail travel from the government. Sustainability is one aspect of this but SNCF is government-owned so they have an agenda there too,” Sachdave points out.

When it comes to booking rail travel, OBTs are playing their part, displaying appropriate rail options alongside flight search results. American Express Global Business Travel recently launched a carbon filter in its Neo booking tool that ranks results by CO2 emissions. A search for travel between London and Brussels, for example, would show both air and rail options but Eurostar, with lower CO2 emissions, would be displayed at the top.

AIR-RAIL INTEGRATION
While rail and air are often set apart as rivals, there has been a recent spate of developments with regards their integration in bookings. However, “it is not a post-Covid trend” says Sachdave. “GWR was the first to do this in the UK quite a while ago.”

In 2015, GWR got together with Heathrow Express and Singapore Airlines to facilitate bookings that joined up the three providers on journeys from 11 destinations in the UK’s South West to cities across the carrier’s network. The ‘rail-fly’ partnership also had the potential to deliver savings – up to 13 per cent on bookings between Bristol and Brisbane, for example.

Elsewhere, SNCF and Air France work together on an Air&Rail programme; in Germany, Lufthansa offers Deutsche Bahn rail services between Frankfurt and Cologne; and Heathrow Express has a successful partnership with Aer Lingus.

In addition, NS Dutch Railways, Thalys and KLM were due to start co-operating on the Brussels-Amsterdam Schiphol route at the end of March this year but this has now been delayed because of the coronavirus crisis.

In August, Swiss introduced an Airtrain offering between Geneva’s Cornavin central station and Zurich Airport in collaboration with Swiss Federal Railways. Selected services are assigned Swiss flight numbers and travel on those services is included in the flight ticket. It already has similar arrangement for customers travelling to/from Zurich Airport from Basel and Lugano.

Also in August, Etihad Airways expanded its AccessRail partnership that enables passengers to book rail tickets alongside airfares using its EY code. It has added seven rail routes from Frankfurt Airport and launched in the UK with 16 westbound rail services from London with GWR. It will also add 28 destinations across Italy with Trenitalia subject to government approval.

“There should be more of this kind of integration but it comes down to inventory and pricing structures,” says Sachdave. “There’s a lot of inventory in the UK at the moment so it’s a good opportunity to try and interline rail and air.”

THE UK SCENE
The autumn will deliver some noticeable developments in the UK. Train operators are reinstating the vast majority of their pre-Covid timetables in September and the Williams Rail Review and its long-term strategy for the rail industry could finally be delivered.

The end of the six-month Emergency Measures Agreement will also come to an end, although it’s unclear if this will be extended. EMA was implemented by the government in March to see operators through the pandemic when passenger numbers crashed.

“Volumes are down and the industry is predicting it will be three to five years to get back to 2019 volumes, if at all,” says Sachdave. “Working from home is here to stay. The pandemic has merely accelerated it. I don’t feel it will be until October or November that we see passenger numbers really returning and then can railways manage social distancing? Operators say capacity could go up to 60 to 65 per cent if it’s reduced to one metre, but at two metres they’re still stuck on 20 to 25 per cent.”

There’s also increasing clamour for a new industry body – a ‘Strategic Rail Authority Version 2’ as Sachdave calls it – comprised of regional rail authorities. The SRA operated from 2000 to 2006 with the remit of improving passenger experience and increasing revenues.

“In the UK, the make-up of stakeholders is far too complex. In other European markets it’s a lot more clear-cut so they can make strong, decisive decisions without upsetting stakeholders. It’s so complex in the UK and it challenges innovation. The industry needs clarity for who’s accountable for what part of the journey and what the overall strategy is,” says Sachdave.

Meanwhile, several major UK rail infrastructure developments continue to create headlines. HS2, the high-speed rail line that will initially run from London to Birmingham and then on to Manchester and Leeds, survived a government review ordered on the grounds of its financial and environmental impact. It won’t be completed for another decade and estimated costs have spiralled from £30billion to nearly £90billion.

Crossrail is significantly closer to operations but will now not be fully open until the first half of 2022 – more than three years after its original opening date. The line, which will run east-west through central London, will also need an additional £450million before completion.