NTV and deregulation: a new era for rail?
Last month the NTV Italo, owned by Ferrari boss Luca Cordero di Montezemolo, and boasting a top speed of 300 kilometres per hour completed its first full service trip from Naples. The distinctive red bullet trains will initially run a high-speed service along the newly built Milan-Florence-Rome-Naples route, with a view to gradually expanding across Europe. As the first privately owned, high-speed train, the birth of the NTV Italo is a momentous moment for the international rail industry.
However, it is not just the new trains that are significant, but NTV itself as it is the first rail venture to be developed as a direct result of European deregulation. It is the first concrete proof that, with the ability to operate across Europe, entrepreneurs are seeing a wealth of potential opportunity and revenue to be had in backing or setting up rail companies. Arguably, the consumer choice that this will bring is good news for the traveller. As we can see from the airline industry, a competitive market can drive down prices, cut journey times and improve customer experience. For the first time European rail travellers will have a choice of the carriers and services that they would like to use. In Italy, this has not been the case for the last 150 years.
Furthermore, private high speed companies such as this, which offer an airline based model of tiered seating and ancillary services will also provide a genuinely competitive alternative to travelling by air. The NTV is already taking on one of Europe’s busiest city-to-city journeys – Naples–Rome and with a journey time of just three hours and no long wait at the terminal, it is a worthy adversary.
As new companies enter the market we can expect to see an increasingly fragmented and complex competitive environment and this will have far reaching effects on the future face of the rail industry. As national rail companies have to state to compete for domestic routes, they will need to upgrade their services and focus on the needs of the individual traveller in a way that has not traditionally been the case. Adopting next-generation distribution systems which enable them to reach the traveller through the most appropriate channel, be that direct or indirect, and which will allow travellers to book cross-border or cross-organisation journeys on one ticket, will be key to achieving this. So too will the ability to offer ancillary services and personalised journeys.
By the same token, new ventures will need to adopt new and innovative systems if they are to carve a place in the market for themselves against established and trusted brands. With travellers increasingly demanding a seamless door-to-door journey, we can expect to see an increasing number of rail companies looking to adopt mobile ticketing technology which will allow customers to simply turn up and board the train, with no queuing and no need for a paper ticket, as well as to modify and update their journey from their mobile device.
Finally, if rail companies are seriously going to compete against short-haul flights they will need technology that allows them to display their product alongside air products on any given city pair. This will give travellers greater choice and visibility of high-speed rail as a viable alternative to air travel. With deregulation as the driver, and innovative new technology as the enabler, the launch of NTV could be just the beginning of a new era for rail.
