Is a passenger railway operator capable to attract customers without investing extra funds? In other words, what could be done when trying to save a company without having enough funds? This is the case of the domestic passenger operators in Eastern Europe countries. Confronted with the aggressive competition of road transport, either public or individual, and swept of their feet by market liberalisation, these companies found themselves in a tragic financial situation. They lost customers, subsidies and the interest of rulers. One of the worst situations is that of the national companies in Romania and Bulgaria. Every new budget comes with a new deficit to be recovered. The solution lately promoted for domestic railway companies is that of an “imported” management, that would stimulate the company’s profitability following the footsteps of a private business. Most of the time, the first measure announced is staff cuts. This reduces costs, but doesn’t bring new customers. Another measure: giving up non-profitable routes. Short-distance routes, grabbed by road carriers and a neglected infrastructure, they can still become profitable under private railway operators. As a result, the domestic operator loses more customers and, on the long-run, the opportunity of new gains.
A strict internal reorganisation and a train schedule as close to the demand as possible will maybe solve more problems. The reorientation of the employees’ activities and an improved dialogue between central and regional authorities are solutions which don’t require financial effort and which can metamorphose the activity of such a company. Private-inspiration marketing and an active communication department are also necessary. A thorough study of mobility demand, followed by the correct adaptation of the operator’s offer can bring more money than giving up routes or reducing trains. Examples from Romania have shown that passengers can be attracted by frequency where there is no possibility to increase speed or by cleanliness and kindness where rolling stock is obsolete.
Eastern Europe is considered one of the attractive markets for rolling stock acquisition, especially for multiple-units and electric units to make energy and fuel consumption efficient. But massive tenders for such activities are still pending waiting for non-reimbursable financing or loans. Therefore, we would like to hear more often about solutions which don’t make reference to the financial aspect.
by Florentina Ghemuţ
Consultant
Club Feroviar
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