Thu. Mar 21st, 2019

The Spanish AVE, the second cheapest in Europe

The Spanish AVE, the second cheapest in Europe


For AVE users, the service is usually rewarding for the speed to reach their destination and their comfort. The "but" they usually find is in the price, which many consider high, especially for family travel. But the reality is that Spanish service is the second cheapest in Europe. According to a report by the International Union of Railways (UIC), the average price of a round-trip AVE ticket in Spain is 96 euros, compared to 122 euros for a high-speed train ticket in Germany or 107 euros that costs in France. Only Italian prices are below the Spanish, 86 euros. The reason is to be found in the fact that Italy is the only European country that has already liberalized the service and that it has a private operator, Italo. This company started operating in 2012 and its arrival in the market has introduced a competition for the public operator, Trenitalia, which has not only contributed to reduce the prices of tickets but also to increase the number of travelers, which has gone from 25 million in 2011 to 64 million in 2015.

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The liberalization of high-speed services also seems to be the incentive that will spur competition and prices in Spain. The competition for Renfe will arrive in December of 2020 and the public operator already expects that it will cause a substantial reduction of the ratess. For this reason, for months, the company has been working on its "low cost" service, which could operate with discounts of up to 40% over current average prices, as explained a few weeks ago by the president of Renfe, Isaías Táboas.

In the same measure as in Renfe, where a very positive effect of liberalization is expected, it is in Adif. The public manager of the railway infrastructures drags a debt of 16,000 million euros and trusts that the competition increases traffic between 30% and 50%. That would raise their income by the fees charged to operators to use their infrastructure and alleviate their financial situation. The Spanish rail system has ample scope to assume the entry of private companies. As recently highlighted in a report by the National Commission of Markets and Competition (CNMC), the network is underutilized. The most exploited corridor is Madrid-Barcelona, ​​with 45% of its roads being used. That implies that it could duplicate its use without becoming saturated. More problematic would be the parking of the trains of Renfe's competitors, since the stations have a more limited space, although Adif ensures that it is working on solutions to the problem.

Although there are many companies that have applied for the qualification, the license to compete with Renfe, only one, Acciona, has publicly shown its willingness to compete with the public operator. And not only in the international corridor between Madrid and Montpellier, line that will explode in union with Ilsa -owners of Air Nostrum owners-. The signature of the Entrecanales family has shown its willingness to compete with Renfe in all those brokers it deems appropriate.

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