Deutsche Bahn is likely to face growing competition on Germany's long-distance rail network in the future. On Friday, the Federal Network Agency (Bundesnetzagentur) cleared the way for Italian rail operator Italo to enter the market. Under the new network timetable starting in 2028, DB Infrago, the infrastructure division of Deutsche Bahn, will be required to make room for competitors on key long-distance routes. Other companies, such as Flixtrain, could also benefit from the change.
From 2028, Italo plans to offer long-distance train services on the heavily used, and therefore particularly profitable, routes from Munich via Cologne to Dortmund, and from Munich to Berlin. To secure these routes, the company had called for changes to the criteria used for allocating rail paths.
In principle, companies other than Deutsche Bahn are already allowed to offer long-distance rail services. However, Infrago draws up its network timetables on a year-by-year basis. Italo, which has budgeted substantial investment sums, had called for multi-year framework contracts to be awarded in order to provide the planning security it needs.
The Federal Network Agency did not grant this request. However, at the end of June, it proposed introducing a competition clause designed to enable Italo's market entry. Specifically, the plan foresees that Infrago will in future be allowed to allocate no more than 60 to 75 percent of rail paths on heavily used corridors to a single company. The agency retains some discretion over the exact percentage.
"This ensures that at least one competitor to DB Fernverkehr AG can actually operate services," the Federal Network Agency explained. It said it had taken into account the opinions of the Rail Infrastructure Advisory Council, the Federal Cartel Office and the Monopolies Commission since the end of June, but was sticking to its proposed approach. The Monopolies Commission had welcomed the proposal, criticizing only the remaining discretion given to Infrago in setting the percentage figure.
Deutsche Bahn, for its part, had criticized the Federal Network Agency's proposal. The group warns that competition on highly profitable routes could come at the expense of services on less in-demand routes. It also rejected the Network Agency's requirements regarding the allocation of station space, such as ticket counters and lounges, to new competitors. "We will examine and evaluate the Federal Network Agency's decision in detail," a spokesperson for Infrago said.
The rail union EVG also views Italo's market entry critically. EVG chairman Martin Burkert accused the Italian company of "cherry-picking" and warned that Deutsche Bahn's services in smaller towns would suffer as a result. The rival union GDL disagreed: "Any concerns that connectivity in rural areas would be jeopardized by awarding lucrative routes to competitors can be dispelled from the outset through thoughtful allocation practices." GDL chairman Mario Reiß said he hoped Deutsche Bahn would now improve its own services.
Mofair, the association representing rail companies, welcomed the Network Agency's decision. "DB companies, their closely aligned union EVG, and some other stakeholders among states and public transport authorities see only the problems of greater competition in long-distance rail in isolation, but not the opportunities," the association stated.
"Yet competition in this country has already led to higher quality and lower prices for public transport authorities in regional rail, and to more affordable prices in long-distance rail as well."
The ecological transport association VCD called on policymakers to strengthen passenger rights in light of Italo's upcoming market entry. "Today, passengers have no right to continue their journey free of charge if, for example, a delayed ICE train causes them to miss a connecting Flixtrain service," said VCD federal chairman Matthias Kurzeck. "This urgently needs to change."
The agency said it was aware "that the decision could usher in a fundamental shift in long-distance passenger rail travel." "Greater competition has the potential to create better offerings for passengers," argued agency head Klaus Müller. "We are convinced that our decision will set competition in long-distance rail in motion."
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