Ouigo in Spain: Two Years In, Opportunities Ahead

Two years have passed since Ouigo, the fast-train operator, began service in Spain, marking a turning point in passenger rail where competition to the long-standing monopoly began. The French brand entered a market it labeled as “elite” by offering low fares, inaugurating its first route with five daily departures between Madrid and Barcelona and a stop in Zaragoza. Since launch, the company has transported six million passengers, a milestone discussed in this interview. Federico Pareja, Ouigo’s director of commerce and marketing, is highlighted as a pivotal figure as the company plans to expand along its southern corridor.

With these two years of experience, is the low-cost model sustainable for Ouigo?

It remains viable provided operating costs stay normal and energy prices do not spike as they did last year. An interesting point is that electricity has not been included in ticket pricing, even though the business had anticipated a tenfold electricity surcharge in its projections.

Was the two-year period aligned with initial plans or is the current balance negative?

The company met its passenger targets and observed a positive market reaction. Before Ouigo entered Spain, high-speed rail was seen as elitist because price was a major barrier. The perception has shifted, opening travel to thousands who previously could not afford it.

There have been disputes with ADIF regarding rail access fees.

The company contends that the fees to use the track are excessively high, unmatched by any other high-speed line in Europe. If these charges were reduced, Ouigo could lower prices. Stopping the operation altogether was never considered, but one route, Madrid-Barcelona via Zaragoza, has not proven profitable.

Why isn’t it profitable?

On this route Ouigo pays for capacity rather than price per seat, a model not common elsewhere. With double-deck trains designed to maximize passenger volume without compromising seating space, Ouigo pays the same fare regardless of full or empty trains. The current ADIF agreement is not sustainable, and profitability remains elusive despite significant investment to enter the market.

If the situation isn’t resolved, will prices rise in the future?

Ouigo has not contemplated price hikes. The focus is on cutting costs or rethinking the pricing framework where capacity is penalized. The company already bears the burden of wagon weights on the rails. Paying more for unused capacity makes little sense; the aim is to keep fares affordable to compete with road travel. The overarching goal is to shift travelers from road to rail.

After Iryo’s entry, will Ouigo still offer competitive options?

Competition is beneficial for the market, and Ouigo welcomes it. Iryo has increased frequencies, but the overall effect has not dramatically reduced passenger numbers. Ouigo maintains high occupancy, around 95 percent, though ticketing has become cheaper compared with a year ago. Given current costs, there are questions about Ouigo’s sustainability; if costs fall, prices can stay low, otherwise market dynamics will push prices up in response to supply and demand.

Is Ouigo’s presence in the Spanish network at risk?

The company envisions a continued presence in the medium and long term, believing there is room in the market for multiple operators.

How many passengers does Ouigo carry relative to the sector?

Ouigo has carried about six million passengers in two years, with five million on the Madrid-Barcelona corridor. Around 25 to 30 percent originate from or arrive in Zaragoza. Total sector data will be published by the CNMC for the first quarter of 2023, marking the first full period to measure traffic generated by the third operator.

What about ongoing developments?

Ouigo views the period as a strong market challenge to new entrants. The company maintains a rate comparable to other operators, and the rail infrastructure data are monitored. An incident early on received disproportionate media attention, but it has been demonstrated that it was a line-related issue rather than caused by Ouigo. The event was interpreted as a setback but did not reflect broader operations.

Was the press coverage fair?

The rise of a low-fare model drew comparisons to low-cost airlines, suggesting a compromise in quality. Ouigo rejects that impression and points to travelers’ satisfaction and ongoing return business as proof that the value proposition holds up over time.

Would a larger fleet speed up incident resolution?

A larger fleet is not essential. The focus remains on promptly addressing incidents as they arise. Ouigo operates with a schedule that prioritizes reliability over frequency, and there have been only a few incidents in two years of operation.

What lies ahead?

The company plans to open waiting corridors and has already launched services to Valencia and Alicante with a stop in Albacete. The long-term objective is expansion further south as quickly as possible. On the Madrid-Barcelona line, the framework with ADIF currently permits five round trips per day with three Zaragoza stops. More frequencies would be considered if allowed, but that decision rests with the rail authority.

Are intermediate stops such as Calatayud or Tarragona on the table?

Not at the moment due to Public Service Obligations. Stopping at those stations would require compensation from Ouigo, which is not feasible under current public service constraints. Instead, Ouigo focuses on services between Madrid and Barcelona while adapting schedules to benefit Aragon residents traveling to Madrid for business meetings. The third operator has strengthened its position in the corporate market, but Spain remains a landscape favored by small and medium-sized enterprises that value competitive pricing, with Ouigo currently offering the strongest option.

Presumably, Iryo has introduced travel passes as part of its strategy. How is Ouigo responding?

There are several government proposals to create subscriptions and price reductions. Ouigo has not adopted a subscription model because its existing prices already provide strong value for customers seeking flexible travel.

What about the southward connections? When will they be functional?

Technical issues with safety systems have delayed service rollout to the south. The plan is to start operations there in 2024. Once running, Zaragoza will connect to Andalusia via Madrid, though a direct Madrid transit is challenging and high-capacity trains require careful scheduling. Ouigo’s view is that filling such trains without Madrid as a transfer point would be extremely difficult.