EU Report Highlights Benefits of Rail Competition on Prices and Sustainability

Photo source: Europe’s Rail Joint Undertaking

A new report from the European Commission confirms that competition in rail travel yields positive results for ridership and ticket prices while providing significant benefits to society.

Market officials suggest that this study should serve as the blueprint for the rail agenda of new EU Transport Commissioner Apostolos Tzitzikostas.

Rail competition drives affordability and decarbonization

Photo source: EU Agency For Railways

According to the Commission’s Directorate-General for Mobility and Transport, railways are “a crucial lever” for decarbonizing the transport sector due to their relatively low CO2 intensity.

The study reveals that commercially driven competition in the market, often referred to as open access, has “both decreased ticket prices and improved the quality of service compared to the pre-competition landscape.” These two primary effects have made railways more appealing to passengers, increasing demand for rail travel and encouraging a shift from competing modes of transportation.

Furthermore, the study highlights that in cases of competitively tendered Public Service Obligations (PSOs), authorities that employed competitive awards consistently achieved cost reductions, enabling enhancements in rail service quality.

Insights on rail freight

Photo source: European Rail Freight Association

The report also notes that rail freight is “almost exclusively organized through open-access competition”, whereas both competitive and regulated models have been applied in the passenger sector.

The European Rail Freight Association (ERFA) points out that despite gradual market liberalization, the report identifies several sector concerns, including deteriorating railway infrastructure, costly technological upgrades, inequitable state aid, and the complexities of cross-border operations.

ERFA President Dirk Stahl emphasized that the study should serve as a blueprint for the rail agenda of Transport Commissioner Tzitzikostas. He stated that it is essential to prioritize overcoming the challenges identified in the rail freight market to complete the Single European Railway Area and increase rail freight market share.

AllRail welcomes the report and calls for action

The publication of the Commission’s findings was met with approval from AllRail, the Alliance of Passenger Rail New Entrants. They highlighted the report’s warning that several challenges hinder the realization of competition’s full potential, particularly the necessity for “easy access to all types of rolling stock” and “equal access to ticket vending platforms for operators”.