Year 2025. This will be the year in which Ouigo expects to see the green numbers. It is the response of the French train operator to the interest of the Minister of Transport and Sustainable Mobility, Óscar Puente, to know the accounts of Ouigo, as he conveyed to public opinion during an event held a few weeks ago in Madrid.
Until then, losses will preside over the accounts of 2023 and also, although less, of 2024 as expected by the company, which despite this does not give up in maintaining a strong price war in the Spanish market which in turn affects the accounts of the other two operators, Renfe and Iryo.
Despite the fact that Ouigo carries in its DNA being a "low-cost operator" and thus defined itself since its entry into Spain, the SNCF subsidiary is not immune to the effects of its strong commitment to low prices, which the minister has come to be called "dumping". In order to maintain it, in October it announced a temporary reduction in train frequencies on the Madrid-Barcelona corridor. This concentration of passengers on fewer trains during the hours of greatest demand, avoiding seats empty, it was applied between Epiphany and the beginning of Holy Week. Ouigo avoided starting trains in the morning, and reduced maintenance and toll costs.
A twist is added to his original strategy. Due to the delay in operating on the Madrid-Andalusia corridor, in December it expanded frequencies in the Mediterranean, specifically between Madrid and Valencia, and this spring it has inaugurated inland destinations. On March 19, the Madrid-Segovia-Valladolid route opened and in June it will reach Conca. These routes are far from the profitability provided, in principle, by Madrid-Barcelona, but they allow to open a market with less competition and, above all, with cheaper fees and tolls per passenger that allow more margin for a profit.
Ouigo is pending its entry into Andalusia for the second half of the year. "Once the company starts operating on all the lines foreseen in the business plan, that is, once it starts operating between Madrid, Seville, Malaga and Córdoba, the conditions will be met for the company to achieve financial balance (ebitda )", they confirm to La Vanguardia from the high-speed operator.
In other words, as calculated by Minister Óscar Puente, Ouigo's 2023 accounts will continue to be in the red, like Renfe's and also Iryo's. The operators attribute part of these losses to the high impact of the fees charged by the infrastructure manager Adif. The National Markets and Competition Commission (CNMC) is partly right. According to their analysis, during the first quarter of 2023 the fees came to represent for Iryo 91% of the total ticket between Madrid and Barcelona, and 39% for Avlo (Renfe's low-cost company) and Ouigo . That amount fell to 67% for Iryo in the second quarter, while for Avlo it rose to 42% and for Ouigo to 40%.
In the Mediterranean corridor and in Andalusia the weight of the fees is much lower, 20% and 22% of the price respectively. This smaller load allows more profit margin and ticket price reduction. "2025 will therefore be the first full financial year in which Ouigo will be operational on all the planned lines. In this way, the accounts for the aforementioned year will be the first representative of its operational performance", explains the company with French capital.
Until then, Minister Óscar Puente will find it difficult to compare the losses or gains of the three operators of high-speed rail transport in Spain.
