The head of Deutsche Bahn is preparing passengers and corporate customers for additional delays because major construction sites will hinder operations.
(Photo: dpa)
Dusseldorf Bahn boss Richard Lutz has announced even more traffic jams and delays on Germany’s rails in the coming years. They would be caused by the construction of temporary diversion routes in the coming year and the general renovation of important track corridors from 2024, he said on Thursday.
“The infrastructure is limited, outdated and prone to failure,” he said, explaining the measures, “now we’re going to get to the root of the problem.”
How big the problem is now is in the half-yearly report of the state-owned company. Punctuality in long-distance transport fell to an average of 69.6 percent from January to June – and was thus ten percentage points below the value in the same period of the previous year.
It was hardly any better in freight transport, which the federal government actually wants to expand significantly. Here, only 66.9 percent of the trains arrived within the agreed time frame because a number of construction sites and train cancellations delayed the transport. In the first half of 2021, the rate was still 70.8 percent.
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According to information from the Handelsblatt, the unreliability of DB freight traffic has meanwhile led to the first industrial customers instructing their freight forwarders not to put any more goods on the train. Accordingly, the volume of goods shrank by 0.5 percent compared to the first half of the year.
Fewer and fewer goods on the railway
Compared to the level before the pandemic, even six percent fewer goods ended up in Deutsche Bahn wagons. With an operating result of almost minus 300 million euros, the cargo division was the biggest loss maker in the group.
Nevertheless, the Deutsche Bahn Board of Management is sticking to the intention of increasing the share of rail in total German freight transport from the current 18 to 30 percent in 2030. “It remains a challenging goal,” admitted Lutz.
After two financial years with significant losses, Deutsche Bahn expects a significant turnaround, at least financially, for 2022. In the current year, the operating result before interest and taxes (EBIT) will be over one billion euros, announced the Bahn boss. In 2021, the state-owned company had made a loss of 1.55 billion euros, and had even recorded a loss of 2.9 billion euros the year before.
Only a billion profit from the logistics subsidiary Schenker brings Deutsche Bahn into the black.
(Photo: dpa)
The state-owned company should not find it difficult to achieve its new forecast: EBIT was back at 876 million euros in the first half of 2022.
In long-distance traffic, the number of passengers increased by 117 percent compared to the first half of 2021, reported Lutz, in local traffic, which benefited greatly from the nine-euro ticket, by 60 percent. The half-year turnover in the entire group increased accordingly by 28 percent to almost 28 billion euros. “The turnaround came faster than expected for us,” said the Bahn boss.
DB Schenker saves the group result
However, the railway company itself is not responsible for the surprisingly high profits. Without the profit contribution from DB Schenker, the group would still have suffered a loss of more than 300 million euros in the first half of 2022.
The forwarding subsidiary managed by Jochen Thewes delivered an operating profit of 1.2 billion euros in the first six months, which was twice as high as in the same period of the previous year. The extraordinarily high freight rates, especially in ship and air freight, from which freight forwarders usually earn a lot, drove the result up.
It is uncertain whether this will remain the case in the future. The federal government, which owns the company, regularly discusses selling the Schenker subsidiary or listing it on the stock exchange in order to reduce the mountain of debt, which has now grown to 30 billion euros. There are strong forces in the FDP and the Greens in particular that advocate such a separation. In view of the currently high income, an increased purchase price would now be expected.
On the other hand, the plan made in 2020 to part with the British local transport subsidiary Arriva seems less promising at the moment. In 2019, possible sales proceeds of 3.5 to four billion euros were calculated for the subsidiary at Deutsche Bahn, which later had to be canceled due to hidden burdens in the company.
“The schedule for the sale has not changed,” said DB CFO Levin Holle on Thursday. “It should stay with a sale between 2023 and 2024.” After the corona pandemic subsided, investor interest in transport companies increased again.
More: Chaos on the train: “The nine-euro ticket makes you sick”