High-speed rail competition in Spain heats up with a new entrant – Digital Journal

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Iryo offers tickets between Madrid and Barcelona starting at seven euros – Copyright AFP/File Yuichi YAMAZAKI

Valentin BONTEMPS

Competition in Spain’s high-speed rail market is heating up with a new operator starting passenger services on Friday, making it the first nation in Europe with three players in the sector.

The new companies have driven down prices and increased passenger traffic on the high-speed network, which at 4,000 kilometers (2,500 miles) is the second longest in the world after China’s.

Spain is the second most popular tourist destination in the world after France.

The private operator Iryo, which is 45 percent owned by Italy’s Trenitalia, made a symbolic maiden voyage from Madrid to Valencia on Spain’s Mediterranean coast on Monday.

It will start passenger services on Friday with 16 daily round trips between Madrid and Barcelona, ​​Spain’s two largest cities.

Iryo will compete with the firm of the French railway SNCF in the country, Ouigo, which has been operating since May 2021, and with the Spanish state rail operator Renfe, which opened its first high-speed service in 1992.

The arrival of a third operator is a “historic step” that is “new” in Europe, said Carlos Lerida, an expert in rail transport at the Autonomous University of Madrid.

“Until now, no high-speed rail network has operated with three competitors. Spain could serve as a model, ”he told AFP.

Iryo, which begins its operations in Spain with 20 trains, will expand its services in mid-December to include a Madrid-Valencia route.

And in March 2023, trains will begin to run from Madrid to Seville and Malaga in the southwestern region of Andalusia.

Ouigo already operates trains along the Madrid-Barcelona and Madrid-Valencia routes and plans to start services to the Mediterranean port of Alicante, as well as Andalusia next year.

– ‘Democratize high speed’ –

Spain’s state railway infrastructure operator, Adif, awarded contracts in 2019 that allow companies to operate on these routes for 10 years.

The government of Socialist Prime Minister Pedro Sánchez is interested in lowering the prices of bullet train tickets to make greater use of the high-speed rail network.

Increased competition “will democratize high-speed train travel,” Transport Minister Raquel Sánchez said last month, calling the Spanish model for the sector “revolutionary.”

Renfe responded to the arrival of Ouigo in May 2021 by launching a low-cost bullet train service called Avlo.

The company has also renewed its train fleet and improved the service it offers travelers on their trips.

Renfe is running a sale of seats with prices for a 500-kilometer (300-mile) trip between Madrid and Barcelona for just seven euros.

“We see the arrival of the competition as an opportunity, not as a problem,” said a Renfe spokesman.

Average ticket prices on high-speed trains between Madrid and Barcelona have fallen 25 percent since Ouigo began operating last year, according to Spain’s competition watchdog CNMC.

– ‘Underutilized’ network –

Passenger traffic on the route has increased by 47 percent and has increased by 14 percent across Spain’s entire rail network since May 2021, according to Adif.

“The network was underused,” the general director of Ouigo’s Spanish branch, Helene Valenzuela, told AFP, adding that this meant there was “limited risk” in entering the market.

The company spent 630 million euros (644 million dollars) to launch its operations in Spain.

“Our main rivals are planes and automobiles, not other trains,” Valenzuela said.

“At a technical level it is a challenge, because we have to organize the flow (of trains) in the stations. But at the economic level it is an opportunity, ”he added.

Competition in the high-speed rail sector has its limits.

It works on “busy lines” but it is “much more complicated” on other routes where it is more difficult for companies to cover their costs and make a profit,” said the Lleida rail transport expert.

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