Back in 2012, Italy opened its doors to rail competition. NTV Italo became the first privately owned company entering Italy's high-speed rail network. Six years later, we analyze the results.
European rail deregulation results in Italy
NTV was the first rail venture developed as a direct result of European rail liberalization. Since then, NTV has been competing with Italy's incumbent Trenitalia, on the country's main high-speed routes.
According to Prof. Andrea Giuricin, rail market share has grown up to 80%. Moreover, rail ticket prices have dropped by almost 40%. Travelers can find price competitive rail tickets. This is exactly what happened in the airline industry: a competitive market can drive down prices, cut journey times and improve the rail customer experience.
NTV's high-speed rail network
The battle for the customer: high-speed rail vs airlines
The deregulation of rail has an extra effect: it has won the battle for airline customers. Private railways offering an airline seating and ancillary services model provide a true alternative to air travel.
NTV is already taking away airlines market share. Europe’s busiest city-to-city journey from Milan to Rome, with a 3-h journey time and no long wait at the terminal, is a worthy alternative. Moreover, low-cost carriers such as Ryanair and Easy Jet have either reduced their daily frequencies between Milan and Rome or canceled their flight routes between the two cities.
For trains to effectively compete against flights, railways' offer should appear alongside airlines' offer right from the time of shopping. This will give travelers greater choice and visibility of high-speed rail as a viable alternative to air travel.
Competitive forces lead to a more innovative rail industry
With deregulation as the driver, innovation in technology will be the enabler to remain competitive:
- National railways will need to upgrade their services and focus on the customer. Rail distribution systems will help incumbents to reach the traveler through a multichannel strategy and also facilitate cross-border rail bookings with one ticket.
- New railways will need to adopt innovative systems to find a place in the market. From rail mobile ticketing options to a rail chatbot. These are just examples of how to respond to travelers' demand for seamless
Italy is a great example of all the benefits that the rail liberalization can bring. Italo Train's offer helps to connect the European rail traveler, and that's why is now available in Amadeus Air-Rail Display.
2020 European rail deregulation is just around the corner, how prepared are you? Download now our whitepaper the Rail Journey to 2020.