No warning strikes at the railways in the summer holidays: With the arbitration in the collective bargaining dispute of Deutsche Bahn, there is at least some hope for the millions of customers of the state-owned group. If the members of the railway and transport union agree to the compromise proposal of the arbitrators in the next few weeks, there will be one less uncertainty factor not only for passengers, but also for the railways. The half-year balance sheet presented by the group in Berlin shows that the railways are still traveling in difficult waters.
On the one hand, there is the high level of unreliability. “We know that we are currently expecting a lot from our customers,” said rail boss Richard Lutz. Only 68.7 percent of long-distance trains were on the move in the first half of the year without any major delays, as reported by the railway. This year she is aiming for a punctuality rate of more than 70 percent. The main reason for delays remains the overloaded rail network. “Too prone to failure, too old and not measured enough for the traffic that’s taking place right now,” said Lutz.
Billions for renovation and expansion
Numerous construction sites are slowing down passenger and freight traffic. Around two thirds of all long-distance trains are affected by construction sites. Deutsche Bahn is paying billions in advance to finance the investments in renovation and expansion. Money, a large part of which the group should get back from the federal government. But this year, the expenses are pushing Deutsche Bahn clearly into the red. The net loss that the group made in the first half of the year, i.e. after interest and income taxes, was around 71 million euros. In the same period last year there was still a profit of around 424 million euros.
Group sales fell by 10.7 percent to 24.97 billion euros. The fact that at least before interest and taxes an operating profit (EBIT) adjusted for inflation effects came out of 331 million euros is again thanks to the logistics subsidiary DB Schenker. The company reported an operating profit of EUR 626 million in the first half of 2023. The group is currently examining a sale of the logistics group.
Hundreds of unplanned construction sites
In addition to the clearing of the renovation backlog on the rails, hundreds of unplanned construction sites will be added this year. After the train accident in Garmisch-Partenkirchen a little over a year ago, Deutsche Bahn replaced almost 400,000 concrete sleepers as a precaution. In June, the Federal Office for Railway Accident Investigation identified material defects in these components as the main cause of the train accident in an interim report. At numerous additional points in the network, trains now have to slow down until the sleepers are inspected and replaced.
Lutz: “Boom in train travel”
But the many delays and cancellations have not stopped people from using the train. “We have a boom in rail travel,” said Lutz. In long-distance traffic alone, the group recorded around 68 million passengers between January and June of this year. That was 15.4 percent more than in the same period last year. The Deutschlandticket has already fueled the trend in the first two months of sales with around eleven million subscribers in regional transport. “This is the most important factor in expanding earnings,” emphasized the CEO.
Those responsible must also get the problems in freight traffic under control. Here, too, a high level of unpunctuality leads to dissatisfied customers. DB Cargo is to be restructured without losing jobs in the operational area, company boss Sigrid Nikutta recently emphasized. The railway subsidiary made a loss of almost 860 million euros in the first half of the year – mainly due to the unprofitable single wagon traffic.
Expect more delays and cancellations
It will take a while before the situation on the rails improves. First of all, passengers and freight customers will have to be prepared for numerous delays and train cancellations in the years to come. With a general renovation, the railway wants to completely block important corridors and bring them into shape within a few months. The start is next summer on the Riedbahn between Frankfurt and Mannheim. Gradually, further knots are to be dissolved in this way and rail traffic is to flow better.
The federal government also wants to free the infrastructure division from the pressure to make profits and convert it into a non-profit company. The government has also approved around 15 billion euros in additional investment funds for the next two years. The railways will need the money, because in the long run they will not be able to cope with the high investments alone, emphasized Lutz.
