Electricity costs wipe out profits in 2023

Richard Lutz

The CEO of Deutsche Bahn currently has to sign electricity contracts for 2023 – at significantly higher costs.

(Photo: dpa)

Brussels The forthcoming price increase at Deutsche Bahn will not fully compensate for the additional costs caused by the sharp rise in electricity prices. “We expect a significant drop in earnings next year because we have additional costs that we definitely cannot and do not want to pass on,” said Bahn boss Richard Lutz to the Handelsblatt. For 2023 he expects additional costs of 1.5 to two billion euros.

Lutz said his goal remains to win more customers for Deutsche Bahn. Stronger price increases, on the other hand, would have entailed the risk of losing market share.

Deutsche Bahn announced in September that it would increase long-distance fares by an average of 4.9 percent. According to the EU Commission, inflation in Germany will be around 8.8 percent this year. It is mainly driven by energy prices, which make up a large part of the Deutsche Bahn Group’s costs.

“To compensate for that, we would actually have to increase the ticket prices much more,” said Lutz. He did not name a specific value.

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Deutsche Bahn buys the electricity through long-term contracts. Accordingly, the strong increase in electricity prices this year will only have a minor impact on the company. The group expects an operating profit of more than one billion euros. In 2023, however, the higher costs will clearly reach Deutsche Bahn.

>> Read here: Union puts rail customers on a hard bargaining round

Lutz warned that if electricity prices were not reduced, the climate would be damaged: “Some competitors are already using diesel instead of electricity in freight transport. Commercially, that’s the right decision, but it’s a catastrophe for the CO2 balance sheet.

It is currently unclear to what extent Deutsche Bahn and its competitors on the rails will benefit from the planned electricity price brake.

Lutz described the 49-euro ticket as a “healthy compromise”. He does not expect overloads like the nine-euro ticket in the summer, but that in the long term more people will switch to the train and do without their own car. Accordingly, the offer must be expanded.

The federal and state governments have agreed to offer a local transport ticket valid throughout Germany for the price of 49 euros in the coming year. However, it is still unclear whether it can really be introduced as planned, as bus and train operators are demanding further financial commitments.

>> Read here: Government circles: Deutsche Bahn subsidiary Schenker is to be sold

Lutz spoke on the sidelines of a celebration of the 20th anniversary of the ICE connection Frankfurt-Brussels in Brussels. The railways are currently recording the highest growth rates on such international connections. Interrail tickets also sold particularly well this year.

Deutsche Bahn wants to further expand cross-border connections. At the end of 2023, the cities of Berlin, Vienna, Brussels and Paris are to be connected with night trains via the Frankfurt am Main hub. The Austrian ÖBB provides the trains for this.

“We want to make financially attractive offers so that people have the opportunity to forego flights,” said Lutz.

More: Unpunctual trains, poor quality – Bahn boss Lutz promises: “It will be better in 2023”

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