Big job of trains high speed It is in full swing in Spain, thanks to the liberalization of the railway and the entry of private competitors into the former railway monopoly. Renfe. Iryo The company, controlled by state-owned Trenitalia (45%), Air Nostrum (31%) and Globalvía (24%), is now celebrating the one-year anniversary of its first trip to Spain. In a year when it adds 5 million passengers (the target is to exceed 5.7 million next year, 15% more), it reaches eleven national destinations and captures a quarter of the entire Spanish market.
“Iryo He has a vocation for persistence and leadership. “We are here to stay and grow in Spain” Iryo CEO warned Simone Gorini: in a meeting with the press this Thursday. The company’s expansion continues (it launches the Barcelona-Seville cross-route on December 10) and the shareholders’ plans are to go even further.
Adif, The operator of the country’s road network infrastructure is preparing for a second liberalization of the sector by giving private competitors access to new corridors that will connect Madrid-Barcelona, Madrid-Levante and Madrid-Sur. State group currently running Galicia corridor, Murcia connection and Mediterranean Corridor are also open to competition. “We are ready to take advantage of all opportunities that will arise in the coming years. Adif is working on a new capacity allocation and we will analyze the development of all these routes,” emphasized Gorini, while admitting that the group will need to purchase more trains to add to the 20 trains that currently make up its fleet in the Spanish market.
The plans of Iryo and majority shareholder Trenitalia (controlled by Italian public company Ferrovie dello Stato) go further and also International connections from Spain. The aim is to launch Barcelona-Paris route In this context, it competes directly with the French public group SNCF (which operates Spanish high-speed under the Ouigo brand) and Renfe (which plans to activate this route with the French capital next summer after opening Barcelona-Lyon). Until 2022, the Barcelona-Paris link was operated together by Renfe and SNCF through a joint venture, but the French group broke the alliance and started operating it alone.
“We are definitely interested in the Barcelona-Paris route,” the CEO summarizes. “There is demand and demand is being created,” he notes, noting the competition he will have to deal with in connectivity. Renfe and SNCF. Iryo and Trenitalia France, the French subsidiary of the Italian state group, are working on technical issues to make the launch possible, for which the companies have not yet set a date. Both companies cooperate in approving trains to run on international routes. Trenitalia France currently operates the Paris-Milan and Paris-Lyon cross-border route and now wants to expand its network with a connection to Spain.
“Risk” to profitability
All high speed operators (Renfe, Oigo and Iryo) as well as the National Competition Markets Commission (CNMC), Reduction of fees collected by Adif By using their own means as a way to further amplify the effects of liberalization. “Wages are high in Spain. The weight that wages must have to achieve profitability is too high,” Gorini complained.
As recently confirmed by the Alsa and Eco Rail alliance, competition is high in the Spanish market, with three major operators and four operating brands, and new groups maneuvering to join the next wave of liberalisation. The emergence of new competitors is seen by Iryo as a risk to the sustainability of the industry.
“We have to see how Adif proposes the appointment of new capacity in the future. Operators who have currently invested in the country are ready to take advantage of these opportunities that may arise. [de nuevas rutas liberalizadas]. But the entry of more operators would pose a risk to profitability,” Gorini summarized. Given that the company’s growth plans include the future liberalization of these services and opening them up to private firms, its entry into Cercanías is completely unlikely.
Iryo does not set deadlines but predicts them It will be profitable “for years to come.” The high-speed industry has engaged in a trade war to capture share, leading to a price war with lower fares to attract passengers. According to Iryo, it is a commercial unrest that will eventually normalize and lead to an increase in ticket prices. “We are now here with promotional prices. Once the market stabilizes, prices will adjust,” the CEO predicted.