Want green travel? Add competition to high-speed rail lines

COVID, no doubt, was bad for travel. But it was good for reducing travel’s effect on the environment, particularly by airlines, the industry’s most problematic sector in terms of carbon emissions.

That hasn’t lasted, as travelers have returned to the skies with a vengeance, and alternative approaches — like educating stakeholders to go green or imposing laws to promote more sustainable options – haven’t gained much traction.

Into this fray comes a report with a novel suggestion: If you want more people to travel by carbon-friendly rail, give them more high-speed lines – and more competition to lower costs and maintain customer service standards.

That’s the conclusion of new research from SilverRail, an information technology company that specializes in rail ticketing and operations. While that might sound self-serving, their evidence is in the data, sourced to Andrea Giuricin, the CEO of TRA consulting, from a presentation to the Global Business Travel Association.

• In Spain, when the Madrid-to-Barcelona route added high-speed rail services, passengers choosing trains over planes quadrupled from 12% to 48%. Later, when new carriers were permitted on the line, rail’s share of travelers rose to 73%.
• In Italy, a high-speed rail route between Rome and Milan increased rail’s passenger share from 36% to 58%. The share shot up to 80% after adding competition to the route.
• In the United Kingdom, the London-to-Edinburgh train route saw an increase in passenger share from 35% to 63% following the introduction of high-speed rail.

“This latest chapter in our long-running ‘train over plane’ campaign perfectly illustrates that by focusing on increasing speed, reducing the cost of travel and improving service, we can create a significant change in passenger behavior,” said Cameron Jones, SilverRail’s chief commercial officer.

SilverRail took an average of the market share increases from those three routes and applied that to 28 other European routes now served with high-speed rail. The company estimated that if competition were added to the additional lines, the industry would see an average modal shift of 50%, generating an estimated €1 billion in additional revenue for the rail sector.

Perhaps more importantly, that shift would prevent up to 2.4 million tons of carbon emissions.

Passenger bookings show preference for air

Yet even as surveys show sustainability is an important factor to more than half of travelers across Europe, the data that matters most — travel bookings — reveals that factors such as affordability and travel time carry more weight.

In putting to rest any lingering doubts about a COVID recovery, gross airline bookings in Europe more than doubled in 2022, growing to €95 billion from €41 billion the previous year, according to the Phocuswright Europe Travel Market Report 2022-2026.

The rail market grew as well, but only by 39%, reaching €34 billion. The surge in demand for air travel in Europe withstood higher prices and continued through the first half of this year, the report noted.

“A combination of inflationary pressures and supplier capacity constraints led to higher prices for many travel products,” Phocuswright analysts Ralph Merten and Cathy Walsh wrote. “But after living in a semi-lockdown state for the previous two years, travelers were willing to pay.”

The large increase in air bookings was backed by Omio, a Berlin-based ground transportation platform, which released a report in April comparing data from the first three months of this year to the same period in 2019. The report showed a 20% increase in total train bookings and a 54% decrease in total flight bookings.

More drastic measures to steer more passengers to rail came in May when France implemented a law that bans domestic flights where an alternate rail route of less than 2.5 hours exists. While the law was touted as a push for more sustainable alternatives, the impact has been limited by exceptions that mean, for example, only three routes out of Paris-Orly airport were canceled.

If the rail sector is going to compete successfully, it must do so by providing a comparable experience - finding a way to get people to their destination quickly and cost-effectively.

Cameron Jones – SilverRail

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Yet the law could have more far-ranging effects if it becomes a template for other countries to follow.

Carlos Cendra – chief marketing officer at Mabrian Technologies, which gathers data on consumer trends from around the world – believes that could happen, noting that not only would the move be good for sustainability but that it could help offset problems with demand for air service that airlines’ capacity can’t meet.

“It makes a lot of sense, especially here in Spain, where we have a rail service [that], I think, is the best in Europe,” Cendra said. “We have a wide range of high-speed connectivity in Spain. It makes a lot of sense that regulations that started in France start to expand to other countries. In fact, we are now doing a study on what would be the impact on [all of] Europe if authorities go to banning this short-haul flights, and [what] would be the impact in terms of savings of carbon footprint.”

While such laws may be well intentioned, the booking trends support a more market-driven solution so long as passengers appear unwilling to prioritize environmental sustainability, the SilverRail report concedes. To entice travelers to choose greener travel options, governments would be better off with more high-speed rail lines to help reduce journey times — and increased competition to reduce costs and uphold customers service standards, SilverRail’s Jones said.

“Despite Europe rail’s heritage, the region’s passengers are drawn to air travel for its perceived ability to offer the lowest cost and quickest journeys,” he said. “And while the aviation sector will always have a place in serving long-distance travel needs, its sizable carbon footprint means that, where possible, the world must find greener alternatives to get travelers from A to B.

“Trains, which on average produce 90% less carbon than planes, are the natural choice. However, if the rail sector is going to compete successfully, it must do so by providing a comparable experience - finding a way to get people to their destination quickly and cost-effectively.”

In the video below, watch Cendra talks to PhocusWire editor in chief Mitra Sorrells in the PhocusWire studio at Phocuswright Europe 2023.