Stuck between an undeveloped market and the hangovers of state monopolies, rail passengers face the worst of both worlds

It’s one of the most common questions I field from journalists: “would more private companies help with the state of the railways in Europe?” And rather than a yes or no, my answer is instead “I’m not sure“. That puts me in a strange position – I take no position on a question that has decided railway people for the past two decades at least.

This response is not because I have not thought about it, that I am lacking examples, or that I am somehow indecisive. It is that, having seen and experienced a lot of Europe’s railways, the empirical evidence is all over the place. I’ve seen well run state owned railways, and badly run ones. I have seen impeccable private companies, and dreadful ones. And I have seen better and worse ways to introduce competition into a railway system.

However there is one thing I am absolutely certain that we, as railway passengers, neither want nor need is a railway system that combines the worst of capitalism and the worst of statist monopoly thinking. But that, I fear, is precisely what we are ending up with.

Take the news this morning that ticket prices for ÖBB’s Nightjet night trains are being hiked, reaching a hefty €1029,90 for a trip in a deluxe single cabin (see Andy Brabin on X/Twitter). Sebastian Wilken has more on Mastodon here.

And yes, ÖBB is Austria’s state owned railway company.

Are they entitled to up the prices this way, to the maximum the market will bear? Yes.

Is it ethically right that they do so? I’d argue, no it is not.

Let’s take a step back.

ÖBB has repeatedly argued that its night train routes are only viable with a public subsidy. Night train campaign groups like Back on Track have argued likewise. ÖBB has actively sought public subsidy, and has received support from the public purse in Austria, Switzerland, Netherlands and most recently France.

And then ÖBB gets away with setting prices this high.

Let’s pocket that subsidy (the behaviour of a state monopolist), and then see how much profit we can make on top (the behaviour of a capitalist).

You see what I mean about passengers getting the worst of both worlds.

Yes, this bung for ÖBB buys a nice picture for France’s transport minister Beaune, but is the money his government is sending ÖBB’s way good value? Would the Berlin-Paris and Wien-Paris night trains exist without it? Is the subsidy Netherlands is giving to ÖBB necessary to keep the Amsterdam-Zürich and Amsterdam-Wien running?

We of course do not know the answers to these questions, as there is no alternative operator that could step in to run any of these routes, because no-one other than ÖBB has any rolling stock to run these trains. No private rival has managed to buy any because… yes, you guessed it, the financial situation for the development of this market is deemed too fragile, and that is why companies like ÖBB have sought subsidies.

On and on and on it goes.

What, really, do we want here?

It ought to be either a system that is organised by political actors – national governments and the EU – to establish a framework for the public support of night trains, and the flip side of public subsidy would then also be tickets priced at rates low enough to be accessible for all. Or it needs to be a system where the provision of these routes is left to the market – where there is competition to drive down costs and drive up quality, but in order to foster such a market loans or financial guarantees might be needed initially to start the development of a pool of night train rolling stock.

And yes, this post is about night trains – because the news of the new Nightjet prices was the prompt to write the piece – but similar dynamics are at play on daytime routes like Bruxelles-Paris (ex-Thalys, now Eurostar). No doubt there will be people reading this who have some deeper ideological preference for public or private railways and hence cannot see my practical point of view, and sure, you’re entitled to those view.

But this messy position, with passengers stuck between an undeveloped market and the hangovers of state monopolies, ought to be criticised whatever your ideology.

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