Competition
Misc 07/05/2021

Renfe's monopoly ends

French operator Ouigo will start operating high-speed trains on the Barcelona-Madrid route on Monday

3 min
One of the Ouigo trains operating on the Barcelona-Madrid line
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Renfe's monopoly comes to an end. From Monday its first competitor, Ouigo -French state company SNCF's brand- will start operating the high-speed line between Barcelona and Madrid. Since Renfe was founded in 1941, it has operated the State railway network without competition, but liberalisation of railway transport promoted by the European Union has forced it to open the market to new operators that will come to compete with Renfe in the high-speed line.

Passenger rail transport was formally liberalised in December last year, but the pandemic, with great restrictions on mobility and a historical fall in the number of passengers, forced a postponement of the arrival of new operators for a few months. Ouigo starts operating on Monday, but this Friday it has already made its maiden voyage - for authorities, company staff and press - between Madrid and Barcelona.

"It's a historic day," said Minister of Territory and Sustainability, Damià Calvet, after the arrival of the first Ouigo train at Sants station in Barcelona, two and a half hours after leaving Madrid's Atocha station. "Liberalisation offers more options and more users. The railway follows the example of other sectors, such as mobile phone networks or air traffic", said the councillor. The Second Deputy Mayor of Barcelona, Janet Sanz, has celebrated trains being backed. "Trains save lives and save the economy. They bring people closer and remove pollution", she said.

Cheaper tickets and paying for extras

Ouigo arrives in the State hoping to become Renfe's rival. It will be in direct competition with Avlo, the Spanish operator's low-cost train which will be launched on June 23, after several delays due to the pandemic. The pricing will follow the same price as airlines: the price of Ouigo tickets is low (it started with prices of €9 for the Barcelona-Madrid route), but you have to pay for extras such as luggage -only hand luggage is free-, internet access or an XXL seat. "We want to popularise high speed", said the general manager of Ouigo in Spain, Hélène Valenzuela. The company starts with five trains a day between Barcelona and Madrid, with stops in Tarragona and Zaragoza. According to the company, the arrival of Ouigo in Spain will mean the creation of 1,300 direct and indirect jobs.

The journey time is similar to that of Renfe's AVE high-speed trains, and some of the trains also stop in Tarragona and Zaragoza. On the other hand, Ouigo will not transport passengers to Girona for the moment. The French company plans to launch the Madrid-Valencia-Alicante line before the end of the year and the Madrid-Málaga-Seville line in 2022. When all the lines are operational, Ouigo expects to transport 10 million passengers a year.

The third operator, next year

Ouigo will be Renfe's first rival but not the only one. Ilsa, a consortium formed by the Italian public railway company Trenitalia and the Spanish airline Mare Nostrum, a subsidiary of Iberia, is expected to start operating in the second half of 2022. Like Ouigo, Ilsa will operate the Barcelona-Madrid line, but with much higher frequencies than Ouigo (32 daily), and also the Madrid-Valencia and Madrid-Málaga corridors.

The Spanish rail network is one of the most underused in Europe. The network use rate is just over 32 points, compared with the European average of 54 points, 146 points in the Netherlands, 96 points in the United Kingdom and 78 points in Germany. The entry of new operators will help get more out of the rail infrastructure and attract passengers. The Spanish Competition Regulator estimates that liberalisation could increase operating capacity of the Spanish network by between 40% and 50%.

The Secretary of State for Infrastructures and Transport, Pedro Saura, has stressed that Renfe's competitors boost to high speed trains should contribute towards increasing the number of passengers who opt for the train over the car, thus polluting less. "There will be more mobility, more competitiveness and a reduction of polluting gases", he summarised. It is also expected that train ticket prices will decrease thanks to competition.

The arrival of new operators also carries risks: there may be bottlenecks in stations and tracks that do not have enough capacity to absorb the increase in the number of trains. In this sense, infrastructures such as the new station in La Sagrera, in Barcelona, which will allow decongesting the high-speed rail traffic in the Catalan capital when the works are finished, are key.

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