This is how Renfe's income has been transformed after the arrival of competitors and new rates

The arrival of high-speed competitors and the implementation of a new Renfe fare structure completely transformed the distribution of the railway operator's income in 2021. Invoicing from the sale of tickets in commercial services (AVE and long distance) increased 51%, to 796 million, and did so largely due to the contribution of the routes to the south and, to a lesser extent, to the east.

The sale of tickets on routes to Andalusia, where Renfe still maintains its monopoly, left 227.64 million euros, 61.2% more than in 2020, according to the 2021 audit report of Renfe Viajeros, prepared by KPMG. The increase caused the south to become the market that contributed the most revenue, surpassing that of the northeast (Catalonia and Aragon), which reaped a rise in turnover of practically half, 35.2%. Other locations, such as the northern (+66.6%) and eastern (+64.9%) routes, recorded sales increases even higher than the south, but at much lower levels.

The fact that revenue from tickets grew twice as much in Andalusia and Valencia than in Catalonia on AVE and long-distance routes is not by chance. Since mid-2021, Renfe has had competition from Ouigo on the northeast route, which has led to a greater reduction in tickets compared to the rest of the markets, in which it maintains its dominant position. And this, ultimately, is reflected in revenue.

The liberalization of the AVE it also had an impact on passenger numbers. Because although at the level of income from ticket sales the south ousted the northeast, when it comes to travelers the process is almost the opposite. Catalonia was very close to unseating Andalusia as the most used market within Renfe's commercial services.

The operator registered 4.49 million passengers in the south and 4.44 million in the northeast. The latter was also the corridor that grew the most, with a 70% increase in passengers, due to the 55.8% increase in the south. All this in a year in which Renfe's commercial services transported 18.8 million passengers, 58.6% more than in 2020. It is true, however, that these figures also include different long-distance services, not AVE only.

If the two variables of the audit report are combined, an income per passenger of 50.68 euros is reflected in the tickets sold to the south and 47.82 euros in the routes to the northeast.

The shadow of Covid

I KNOW

In 2021, the coronavirus continued to have a great impact on mobility, which caused Renfe to fall far short of pre-pandema levels, both in terms of passengers and billing for ticket sales.

Renfe's accounts for last year are highly conditioned by the evolution of the pandemic and the comparison with the central year of the coronavirus. The operator lost 368 million euros in 2021, which was 21% less than the previous year. In May of this year, the operator announced that it had temporarily returned to profits after achieving a profit of 3.74 million euros in April.

But the coronavirus was not the only earthquake that the company had to face last year. In addition to the ups and downs caused by the restrictions, Renfe had to deal for the first time in its history with the arrival of a competitor starting in May, when the French Ouigo began operations on the Madrid-Barcelona route. An operator that also landed in Spain with an aggressive commercial offer and a low-cost service.

At the moment, Ouigo only operates on the Madrid-Barcelona route, but its plans include starting to provide its services on the Madrid-Valencia in October and on the Madrid-Seville during the coming year.

User complaints

In addition to facing its rivals, Renfe had to deal in 2021 with the implementation of a new fare system that has received harsh criticism among consumers. The initial idea of ​​the railway operator was to modify the system to implement a system similar to that of the airlines, which usually reward passengers who book more in advance.

The problem is that in the event that it is not booked in advance, the new price of the tickets may be higher than what was obtained with the previous fare system. A change that has unleashed a trail of criticism from users on social networks. Among the routes most affected by this rate change, according to reports from consumer associations, are precisely the routes to the east and south.

Source link