Rail Takes Flight In Europe

Trains in the United States—Amtrak's Acela service excepted—remain an obsolete form of transport long superseded by automobiles and aircraft. In Europe, rail not only is gaining in popularity as the preferred mode of business travel, it is increasingly working alongside aviation and even starting to replace it on certain routes. At the same time, rail companies are working hard on deals, through-ticketing and electronic distribution to maximize their ability to do business with corporate clients.

Apart from its massive environmental advantages, rail often is cheaper than air and in many cases is competitive in terms of door-to-door trip time. Factor in the greater time for executives to work and it becomes a no-brainer for many travel managers. One such example is Thomas Faller, global travel manager for infrastructure company ABB, which has its two main offices in Mannheim, Germany, and Zurich, Switzerland. The rail journey takes three-and-a-half hours, whereas the air journey includes a 45-minute drive to Frankfurt airport and a 55-minute flight. "We push travelers on to the train and our travel agents are instructed to report exceptions," Faller said. "The price difference is a factor of seven but our travelers are pretty happy to use the train anyway."

Among the carriers starting to work closely with rail operators are Northwest Airlines/KLM, Lufthansa and Air France. Passengers flying from Detroit to Paris Charles de Gaulle with Northwest/KLM now can continue on to 13 French cities on the same reservation with high-speed TGV trains operated by French railway company SNCF. TGV passenger volumes from CDG increased 20 percent in 2001 on 40 services a day to 50 cities. Air France also cooperates closely with SNCF to provide not only through-ticketing but onward delivery of baggage between the two modes of transportation.

In the Netherlands, KLM has launched a tie-up with a new rail service between Amsterdam's Schiphol airport and the Belgian city of Antwerp. The thrice-daily trains are part of the international Thalys network operated by the national rail companies of France, Germany, Belgium and the Netherlands. Again, travelers can make one booking but need to show their air coupon at the rail station to obtain their train ticket. KLM awards frequent flyer mileage on the route.

Thalys will open a route from Amsterdam to Paris in 2006 and already has seized the Paris to Brussels market since going high-speed on that route in 1998. There are 24 trains a day on Paris to Brussels (compared with one flight) for a service that takes 85 minutes. Travelers can buy passes offering unlimited travel for three, six or 12 months. The 12-month pass starts to pay back after the 17th journey. Thalys also offers a corporate program with discounts of up to 15 percent plus management information. It currently has 1,500 corporations signed. Another imminent Thalys route is Paris to Cologne.

Domestic rail travel also is making enormous gains in Germany. Lufthansa is reducing or withdrawing—it has not yet decided which—air services from Frankfurt to Cologne, Dusseldorf and Stuttgart in favor of trains operated by Deutsche Bahn. The rail services carry an LH flight prefix and effectively are free for anyone transferring to long-haul flights. "A flight from New York to Dusseldorf via a train connection from Frankfurt costs the same as a flight from New York to Frankfurt," said Wolfgang Weinert, intermodal transport project manager for Lufthansa. Travel managers also can include the LH-prefix train services in negotiated deals with the German national carrier.

Even recent world events have pushed up rail usage. "We have seen rail transactions increase at a lot of corporations," said Mike Bezer, vice president of account management in Europe, the Middle East and Africa for Carlson Wagonlit Travel. "It was rising anyway and Sept. 11 accelerated that trend."

Global distribution systems also have stepped up their efforts to handle rail. Sabre recently added the Norwegian and Swedish rail networks to its database, not to mention BritRail, the ticketing service for inbound visitors to the United Kingdom. Tickets for continental European rail generally are issued on standard IATA stock, with Bank Settlement Plan (equivalent to Airlines Reporting Corp. in the United States) accounting that flows straight into back-office management information systems.

The one exception to all this uninhibited progress, both on and off the rails, is the United Kingdom. Cursed with having invented rail travel, the U.K.'s decaying Victorian network was worsened further by a misguided privatization and fragmentation of its operating company in the mid-1990s, followed by several train crashes that have put the system into a state of semi-paralysis.

U.K. trains not only are more expensive per mile than the rest of Europe, they generally are slower and dirtier. Reservations are less straightforward as well. To book via a GDS, agents must use a system called Elgar, which is not linked to BSP accounting. Despite these problems, Sabre has experienced a 100 percent increase in U.K. rail bookings through Elgar over the past year. Sabre also has introduced a satellite ticket printing facility for agents to print rail tickets on clients' premises, something it already offers in France and Germany.

There are also signs of the U.K.'s many rail network franchisees developing corporate sales, despite most of them effectively being monopolies. "The rail operators I have contact with are beginning to think about talking to corporates," said Louise Innes, travel manager for Edinburgh-based Standard Life and chairperson of the Institute of Travel Management for the U.K. and Ireland.

One rail company that has started corporate deals after initial hostility to the idea is Eurostar, operator of the Channel Tunnel rail service from London to Paris and Brussels. Since the beginning of 2001, it has signed agreements with 20 clients. Director of sales and distribution Adrian Watts is seeking to double that number. "If we believe a company has a strong 'willing and able' policy and an ability to shift market share, we will work with them," he said. "I have always been skeptical about the ability of travel managers to do that but in the past 24 months it has been very noticeable that they can now divert large chunks of business toward us."