The train eats the plane due to the price war with Iryo and Ouigo

by time news

2023-08-15 00:03:39

The liberalization of high speed has triggered train travel in Spain. Competition has brought the sector better prices and more time flexibility for the millions of travelers who move around the country every day, whether for work or leisure, and who mostly prefer the train to the plane. This is confirmed by the National Commission for Markets and Competition (CNMC) itself, which in its 2022 annual report indicates that the entry of new operators (Ouigo and Iryo) in the rail sector boosted the train share compared to air transport.

In total, 23.7 million passengers used high-speed trains in 2022, 76% more than the previous year and even 6% above the 22.4 million train passengers in 2019, a record year for the tourism before the pandemic broke out.

The corridor that is benefiting the most from this railway liberalization is Madrid-Barcelona, ​​where four out of five passengers prefer to go by train (78%) than by plane, despite the ease of the airlift operated by Iberia. Compared to 2019, the increase has been very strong, since then only 64% of passengers chose the train over the plane.

Of the travelers who went by train from Madrid to Barcelona last year, 58% took an AVE, 26% did so with Ouigo and 14.2% with Avlo, Renfe’s ‘low cost’ trains. In other words, in little more than a year and a half since Ouigo began to operate in this corridor, almost half of AVE passengers have changed to trains from other operators, mainly due to the reduction in prices.

Data provided by the Trainline platform confirm that prices for the Madrid-Barcelona route plummeted by almost half (-43%) in the last quarter of 2022 compared to the same period in 2019 due to the entry of competition, despite the fact that in this same quarter the reserves grew almost 70%. According to the agency specialized in the sale and comparison of train tickets, the average price of this route has gone from 81 euros in 2019 to 46 euros in 2022.

On other routes where the new operators are already present, such as the Madrid-Valencia corridor, the preference of travelers for the train over the plane has increased, reaching 90% in 2022 from 86% in 2021, according to the data of the CNMC. In total, 2.9 million people traveled by train between these two cities last year, more than double (108%) than in 2021 due to the entry of Renfe’s new competitors.

the conquest of the south

On the other hand, in destinations where these companies had not yet arrived in 2022, the share of trains compared to planes remained stable or fell slightly. Thus, while the Madrid-Seville route had a share of 90% favorable to the train in 2015, it gradually decreased until reaching 85% in 2022. Something similar occurs on the Madrid-Málaga route, which from 84% preference for the train in 2015 has been falling to 78% in 2022.

We will have to wait for the 2023 CNMC report to find out if the entry of new operators on these routes (Iryo debuted in the Madrid-South corridor last March and Avlo did so in June) with the consequent drop in prices manages to increase here the share of preference for the train over the plane as in Barcelona and Valencia.

In this sense, the air sector has repeatedly argued that they do not see the rail sector as their main competitor and, in fact, they consider that “greater intermodality” is necessary between both modes of transport that allows passengers arriving from any point of Spain by train to Madrid can easily catch a plane to their European or international destinations. The Airlines Association (ALA) defended this intermodality when France banned short flights three months ago, something that the sector sees as “unnecessary” in Spain.

Foreign tourists

Looking ahead to this summer, train travel in Spain has increased up to eleven times compared to last year. Trainline’s preliminary data reveals that coastal tourism has experienced tremendous growth thanks to the establishment of new high-speed operators in cities such as Malaga, where tourists arriving by train have grown by no less than 540% in one year; and Valencia, with a 400% rise.

And these trips are not just limited to domestic tourists. The figures from the platform indicate that foreigners are also changing the way they travel around our country, with a 66% increase in the train compared to the summer of 2022. The increase in Americans who travel by train through Spain stands out, 18% more, followed by British, French and Italian tourists.

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