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Locomore shows the need to remove barriers to market entry, says ALLRAIL

18 May 2017

GERMANY: Locomore filing for insolvency highlights the crippling cost challenges and entry barriers' in the rail sector which are 'limiting the growth of eco-friendly transport', according to the Alliance of Rail New Entrants which represents European open access operators.

ALLRAIL said Locomore was the fourth start-up in recent years to 'fall flat' when trying to enter the German long-distance passenger market. Veolia's Interconnex service between Leipzig, Berlin, Rostock and Warnemünde ended in December 2014, and proposals from MSM and Der Schnellzug were unsuccessful.

ALLRAIL said new market entrants would bring innovation to the rail sector. Impeding them 'can only lead to stagnation and failure', and it 'firmly believes' that countries must create conditions for 'genuine competition'. In particular, ALLRAIL said state incumbent DB's refusal to sell Locomore tickets 'must have been a major contributory factor in its collapse.'

ALLRAIL is calling for:

  • Open and transparent passenger information and ticket sales practices, with ticket distribution integrated with existing sales channels and non-discriminatory access to ticket vending facilities and infrastructure.
  • Combined journey rights for all through rail tickets.
  • A European-level strategy to improve the climate for new entrants, including transparent infrastructure charges based on direct costs only, with limited or no mark-ups as long as rail competes without distance-based road pricing for cars, buses and lorries.
  • Support for financing tools to reduce the risk of short-term lack of liquidity for new entrants.
  • Access to and optimal use of commercial and operational facilities.
  • Improved financing and non-discriminatory access to unused second-hand rolling stock.

ALLRAIL was established end of March by the European Rail Freight Association which represents non-incumbent freight operators, independent ticket retailer Trainline and open access passenger operators LEO Express and Regiojet of the Czech Republic, Sweden's MTR Nordic, Italy's NTV, Austria's Westbahn More members are expected to join.