High Speed Rail Unites Europe

The development of efficient High-Speed Rail (HSR) services is a priority of EU policy, both to promote economic and social cohesion through integration between the main metropolitan cities of the Continent, and reduce air traffic in order to reduce the level of emissions of greenhouse gases and local pollutants. In fact, for distances of up to 600-800 kilometers, HSR offers an alternative to flying with environmental externalities that are equal to approximately one tenth of air travel, as well as better levels of comfort and organizational simplicity for passengers, thanks also to the location of railway stations in central urban areas. The EU target is to double the number of passengers between 2015 and 2030 by encouraging the use of common standards for signaling and safety systems, the management of infrastructure capacity and the digitalization of marketing systems, as well as promoting the liberalization of the sector.

At present, the HSR network in Europe is 11,990 kilometers long, with 3,062 km under construction, 5,913 km in an advanced state of planning and 3,316 km planned in the longer term. The EU also supports this development with community co-financing intended for Trans-European Networks (TEN-T), with a focus on cross-border sections, which can receive funds equal to 50% of the overall cost, and integration with airports, to promote aspects of both integration between railway services and long-haul flights and the replacement of short-haul flights.

In reality, the most incisive aspects of European policies are not only linked to infrastructure policies, but rather to the aspects of standardization of technologies, regulation of access to the market, and critical infrastructure, promoting innovative forms of competition and collaboration between operators.

After the pandemic crisis, which forced a downsizing of services, particularly international ones, the business models of European operators have developed rapidly since the second semester of 2021. The epicenter of business innovation is the Spanish market, where 4 different railway companies operate offering diversified HSR services. The results of this evolution, made possible by the entry of French and Italian operators in the Spanish market, are particularly positive in terms of increase in the number of passengers recorded between Q1 2022 and Q1 2023, differentiated depending on the intensity of the competition. Based on data from the Spanish Competition Authority, which monitors market data in great detail to make eventual regulatory corrections in this phase of major changes promoted by the evolution of the EU regulatory framework, between Madrid and Barcelona there was growth in passenger travel of 56.9%, between Madrid and Valencia of 119%, between Madrid and Malaga/Granada of 29.9%, and between Madrid and Alicante of 19.9%.

The Spanish market sees itself as an evolution of the Italian model where two high-speed railway companies have been operating in direct competition for ten years, offering a benchmark on a global scale, having been the first railway market to have such a high degree of liberalization. Among the elements that can be replicated on a European scale that have emerged in the last two years in Spain there is also transport flexibility, such as the "Beach Trains", seasonal services to the main tourist locations, and the new attention to international long-distance trains, such as the Marseille-Madrid and Lyon-Barcelona routes. Furthermore, collaboration between shareholders with different backgrounds are also partially new. For example, the Iryo joint venture, promoted by the Italian FS Group for the Spanish market, has a regional airline and an investment fund specialized in the transport sector owning shares alongside the railway company. The involvement of long-term private investors is made possible by the possibility of replicating formulas that use increasingly innovative trains on multiple European markets, thanks to the use of traction and control technologies that once constituted barrier elements to market entry because they were non-homogeneous between the networks of individual countries but have now become increasingly standardized thanks to EU regulations.