French Rules Thwart EU Rail Competition Despite Deregulation

The prospect of competition on Europe's busiest international rail routes receded last week when Air France and German rail operator Deutsche Bahn said separately they see little chance of entering the French market. France has by far the greatest amount of high-speed track in Europe.

The European Union deregulated international passenger services on Jan. 1. However, Air France and DB, both of which previously indicated a wish to compete with French rail operator SNCF on its high-speed lines, ruled out any launches for the foreseeable future. Both claimed that French national laws, which effectively discourage new entrants, have not changed despite deregulation at the European level.

A spokeswoman for Air France said, "It is not an urgent priority as we do not have any visibility of the rail transport deregulation rules," while a DB spokesman told EuroBTN, "theoretically the market is open for new entrants, but in practice there are many exceptions which make it very difficult." As an example, if DB launched service from Frankfurt to Paris, there would be strict limitations on boarding passengers at intermediate stations in France.

At present, all international rail routes are operated as monopolistic joint ventures between the countries involved. DB European rail director Joachim Fried said last week this is likely to remain the model. "Making trains run at 200 kilometers per hour costs a lot of money and only cooperation makes sense economically," he said. DB and SNCF jointly will open a route from Frankfurt and Stuttgart to the south of France in 2011.

However, DB told EuroBTN it remains interested in launching a route from Germany to London and is carrying out feasibility studies on operating its trains through the Channel Tunnel.

Overall, high-speed rail is flourishing in Europe. Channel tunnel operator Eurostar announced today that passenger numbers rose 1.2 percent in 2009 despite the recession and a December snowstorm that shut services. However, these recent setbacks for deregulation are not the first for attempts to expand services at the European level. In November 2009, RailTeam, the organization dedicated to improving links between existing international high-speed services, abandoned a project to introduce integrated ticketing on cost grounds.