Railways are badly damaged by the coronavirus pandemic

Coronavirus pandemic on railway sectorThe coronavirus pandemic on railway sector will have wide-ranging effects, which will impact the railway operators, vehicle owners and the rolling stock industry, according to SCI Verkehr latest report which considers three scenarios.

Due to coronavirus pandemic, passenger rail segment has been directly affected, with a decrease of over 90%, recorded in Italy and France. Rail freight transport has been also increasingly affected since April, with operators reporting declines between 20% and 35%, while car transport has come to a complete standstill.

SCI Verkehr says that the situation of the next months and years largely depends on the further course of the pandemic, the duration of the lockdowns and the stabilisation of the economy. The company has made various assumptions under the “Lockdowns return”, “Disrupted markets” and “Rapid recovery” scenarios.

A renewed lockdown in autumn will see a 40% slump in passenger transport for 2020 as a whole, while freight transport in Continental Europe will decline by 10%. In this most likely scenario, SCI experts do not expect a recovery to pre-crisis levels until 2023 or 2024.

While the high revenue losses of the operators in passenger transport will probably be partially compensated by government programmes, the freight transport operators, which are initially less affected, will also come under pressure due to widespread low margins. Lack of investment funds on the part of the railways will have a negative impact on vehicle procurement, SCI Verkehr says.

According to AllRail, the Alliance of Passenger Rail New Entrants in Europe, the pandemic has led to an unprecedented crisis for independent passenger rail companies which together face over EUR 1 billion in lost income by the end of this year. The association has said that if companies’ costs are not covered, they must declare bankruptcy, which will lead to a heavily impacted not only railway but also the entire transport sector across Europe.

The impact of the coronavirus pandemic on railway sector brought together the railway associations that have called the European Commission to sustain the survival of the railway operators, infrastructure managers and rail supply industry and to massively invest in this transport sector, by integrate railways and public transport into the European recovery plan and providing the needed investment under the next financial framework.

 

 


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