“We are fighting for each traveler in dispute,” said the president of Renfe, Raül Blanco, a few days ago in Madrid. Indeed, the competition of the public operator with the two private companies – Iryo, owned by Trenitalia, the transalpine public company, and Ouigo, owned by the French State – that, for the moment, have begun to operate high speed in Spain is, In essence, a question of rates.
This is indicated by the latest report from the National Markets and Competition Commission (CNMC) on high-speed passenger rail transport. This struggle has managed to reduce, according to the supervisor, travel prices by 40% compared to the period of Renfe's monopoly, but it has also unleashed an unprecedented war between the Spanish Government and the French company, which is the one that is collapsing, quarter after quarter, the amount of the tickets.
The Minister of Transport, Óscar Puente, has even spoken of “dumping” by the French operator, which defines itself as a low-cost company. According to the latest data from the CNMC, taking the route between Madrid and Barcelona as a reference, the average price during the last quarter of 2023 was 37.43 euros in Ouigo. Renfe, for its part, charged 62.39 euros per trip for its AVE and 43.88 euros for AVLO, the low-cost public company. Iryo, for its part, maintained intermediate rates: 43.10 euros per ticket. Compared to last year's prices, Renfe lowered its AVE fares by 20%, compared to a reduction of 11.4% by Ouigo.
The competition, therefore, was fierce and was repeated on the routes between Valencia (where Renfe had to reduce its tickets by up to 23% year-on-year in the last quarter of last year) Seville and Malaga. The political position of the Ministry of Transportation: Ouigo's business strategy, by so aggressively reducing rates in search of gaining market share, is an exercise in “unfair competition,” say sources from the Puente department. The Spanish Executive considers that without the endorsement of the French State, owner of the low-cost operator through SNFC, it would not be possible to do so.
Ouigo has not minded incurring losses during the almost three years it has been operating in Spain (it will be in May). It left 36 million in 2022. The operator asks for time and affirms that its roadmap contemplates reaching financial balance in 2024. Its leadership has responded to the Government's accusations by stating that the profitability of its investment is close, this year or next. next. “This is the first time they have reproached us for having low prices,” said the president of Ouigo Spain, Alain Krakovitch, responding to Puente. Dumping or simple aggressive pricing policy? “We do not receive subsidies,” he replied in reference to Renfe.
The French operator defends itself by putting investment figures in Spain on the table. Hélène Valenzuela, general director of Ouigo, highlighted that the company has invested 700 million in rolling stock in Spain, which has provisions of more than 1,000 million to pay the fees it will pay to Adif in the next ten years (the ministry questions this investment ) and that generates 400 direct jobs and 2,000 indirect jobs. In 2024, Ouigo plans to launch new routes to Valladolid, Málaga, Elche or Murcia. Valenzuela highlighted that several city councils have contacted him to request his services.
For Puente, who has at no time questioned the liberalization of services, the situation is unsustainable and the loser is Renfe. The company announced that it incurred losses last year despite closing with the second highest number of passengers since 2006, 522 million tickets. Blanco, its president, acknowledges that he is making great efforts to adapt to a regime of free competition, but also demands “reciprocity.” The Spanish operator is trying to reach Paris and the French State has not yet provided the appropriate permits. For Renfe, the project is “vital”, even more so when the Olympic Games are held in the French capital in a few months. The Government does not understand the slowness while the high-speed war in Spain shows no sign of peace.
