Renfe will offer "low cost" AVE tickets

Renfe will offer "low cost" AVE tickets

Renfe continues to outline its "low cost" AVE project. The public railway operator estimates that this service will become operational over the next year, just before the liberalization of the sector, as announced by the president of the firm, Isaías Táboas, in a meeting with journalists to explain the strategic plan of the company for the period 2019-2023. Táboas has not wanted to offer many details about what the service will be like because, as he assured, Renfe has yet to polish many details about it. What it has explained is that it will be a project designed to attract customers who use the car because they consider the train to be very expensive. Therefore, the price will be one of the strengths of the service. Their rates could reach an average of 40% lower than the traditional AVE, whose price is 52 euros per trip, according to Táboas.

The AVE "los cost" is, together with internationalization, the pillar on which Renfe's strategic plan is based, to continue growing from 2020, when the sector is liberalized and competition reaches the Spanish railways. Thereafter, any company that wishes may offer AVE services. And Renfe is sure that they will do so with aggressive prices. Therefore, the company prepares a cheaper product that, combined with international business, should allow the company to continue growing, according to Táboas. Renfe is convinced that although the competition operates 16 daily frequencies in the five most used AVE corridors, its revenues will continue to grow thanks to its "low cost" service -with prices 40% lower than those of the AVE to compete with others. operators would be profitable – and its internationalization. According to the plan, this double lever should allow Renfe to increase its sales by 16% in 2023, to 4,600 million euros, and 30% in 2028, to 5,300 million euros. Táboas has not offered data on the expected benefit but it has advanced that last year Renfe earned just over 80 million euros.

Táboas explained that the plan includes a strong investment of 3,000 million euros in rolling stock that Renfe has started to undertake since this month and will be completed in June. The most important order will be tendered in March, when Renfe will commission 200 Cercanías trains valued at around 1,700 million euros. The most probable thing is that the bidding is done in several lots so that the entry of orders is not delayed in time.


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