EUROPE: The coronavirus pandemic is ‘annihilating’ the business cases of many independent passenger operators, and without urgent action the first bankruptcies could be seen this month, the ALLRAIL association of new entrants to the rail market has warned.
On April 9 ALLRAIL said the ‘understandable’ decision to cut services during the pandemic had reduced passenger numbers by more than 90%, particularly where intra-EU borders have closed. As a result, its members faced a loss of income of more than €1bn this year.
Explaining that ‘saving new entrants now will save taxpayer money in the medium and long term’, ALLRAIL called for a number of measures by EU member states to ensure that the companies survive:
- direct grants to cover lost income, with caps for capital-intensive industries being higher than the €800 000 in the European Commission’s Temporary Framework;
- state guarantees for all existing loans and the ability to postpone lease payments;
- protection of workers from loss of income;
- deferral of company taxes and social security contributions;
- the ability to refund customers for cancelled tickets with vouchers rather than in cash, redeemable at same point of sale as where the original ticket was purchased.
ALLRAIL said its train operating members would like to see a suspension of access charges for state-owned infrastructure, including stabling sidings, until the end of 2021 to help with the economic recovery after the crisis.
Its ticket retailing members would like a reduction in deposits paid to all operators while ticket sales are so low.
ALLRAIL called for the EU to ensure that member states’ Covid-19 related financial support is delivered promptly, made available to all operators in need of liquidity irrespective of their ownership, and prioritised based on their carbon footprint and contribution to climate objectives. It also said the Temporary Framework should not ‘disproportionately’ help other modes that compete with passenger rail, such as airlines.
New entrants ‘have the proven ability to attract new passengers to the rail sector once this crisis is over’, ALLRAIL said, ‘but many of them may no longer be around when the time comes.’