PROMISING an attractive alternative to German Rail’s (DB) long-distance ICE services, Locomore’s distinctive orange and black trains and throwback compartment coaches were a welcome addition to the German rail network in late 2016.
The service offered passengers a low-cost means of travel between Stuttgart and Berlin while its crowdfunding model presented an innovative way of raising capital for an open-access rail venture in the liberalised market.
However, Locomore was short-lived.
Despite ridership and revenue per passenger growing continuously, overall revenues failed to increase in line with projections meaning that the service was never cost-effective. With its financial reserves exhausted, the company filed an insolvency application at the district court in Charlottenburg, Berlin, in May 2017.
Locomore was later joined by Hamburg-Köln Express (HKX) on the scrapheap of recent failed German open-access ventures.
HKX, was majority-owned by Railroad Development Corporation (RDC), United States, and initially worked alongside Locomore. It began operating three return services per day, seven days per week between Hamburg and Cologne in July 2012. This was subsequently scaled back to one daily round trip on Thursday - Sunday in December 2015 while the operator introduced a Hamburg - Frankfurt service.
However, further expansion plans were thwarted by HKX’s failure to obtain suitable train paths on the network from infrastructure manager, DB Network. The Frankfurt - Hamburg train was withdrawn in September 2016, and despite attempts to reduce costs and improve financial performance by cutting back the Cologne - Hamburg frequency to a single round trip on Fridays, Saturdays, Sundays and Mondays, HKX announced that it was
suspending operations in October 2017 for two months.
Services were briefly revived over the Christmas period but with a new backer involved, which had also stepped up to support Locomore.
FlixBus, Germany’s largest private long-distance bus operator, reached an agreement with HKX to sell tickets for a single daily round trip for seven days between December 22 and January 2. Prospective passengers were redirected from the HKX website to the FlixBus site, where they could book tickets. They could also do so via the FlixBus smartphone app.
Work with HKX followed FlixBus’ agreement with Czech open-access operator Leo Express to revive the Locomore service. Services resumed under the Locomore brand on August 24 2017 with Leo Express providing operations and fleet management and FlixBus offering network planning, traffic control, customer service, marketing and sales, with tickets sold through its international distribution platform.
A new company, FlixTrain, was subsequently formed, which began operating its own distinctive lime green-branded trains, which are consistent with FlixBus buses, on both the HKX and Locomore routes earlier this year.
FlixTrain’s inaugural Hamburg - Cologne service entered operation on March 23, with trains departing Hamburg Main Station at 08.49 and arriving in Cologne at 12.57, which the company says is as quick from Hamburg to Essen, Düsseldorf and Cologne as an equivalent ICE.
Regular services began the following day with intermediate stops at Düsseldorf, Duisburg, Essen, Gelsenkirchen, Münster and Osnabrück with the return journey departing Cologne at 15.01 and arriving in Hamburg at 18.56. The trains are operated by Nuremberg-based BahnTouristikExpress (BTE), which previously provided traction and rolling stock for HKX.
FlixTrain-branded services replaced Locomore on the Berlin - Stuttgart route on April 26, with the train initially operating daily, and departing from Berlin Lichtenberg at 14.28 and arriving in Stuttgart at 21.29. The train serves five stations in Berlin and stops include Hannover and Frankfurt. The train from Stuttgart departs at 06.21 and arrives at Lichtenberg at 13.38.
Tickets start at e9.99, and with an occupancy rate “well above 60%,” following an “overwhelming” response from passengers, plans were soon in place to expand the service.
An additional Berlin - Stuttgart train departing Lichtenberg at 06.29, and Stuttgart at 14.12 was added on June 21, a month earlier than planned, with an extra Hamburg - Cologne train, which departs Hamburg Altona at 16.36 and Cologne at 11.01 following on July 19.
“Our target was to have 500,000 passengers by the end of this year,” says Mr Fabian Stenger, managing director of FlixBus and FlixTrain. “Based on the initial response from customers in the first few months we expect to far exceed this number. It is not possible to make reliable predictions for 2019 or 2020 at this point, but we are very confident that FlixTrain will remain successful.”
As well as more passengers, FlixTrain could soon serve more destinations. Stenger reveals that the company is considering further expansions of service in 2019.
“We have already applied for new routes for 2019,” Stenger says. “We see great potential in the connections between Berlin and Munich as well as Berlin and Cologne. We are now waiting on the decision on these routes to be made by our colleagues at DB Network.”
More services will inevitably require more rolling stock. However, Flixtrain was unable to reveal its precise plans for fleet expansion, stating that it is “evaluating several options.” For now, Stenger says focus is on standardising the FlixTrain product, so all coaches have at-seat power sockets, high-speed Wi-Fi, and other valued amenities.
FlixTrain is increasingly aligning its services to connect with FlixBus, and Stenger says the objective is to offer an intermodal network with national and international travel connections. He adds that the company is working to reduce waiting times for transfers between trains and long-distance buses as well as increasing the frequency of connecting buses.
“This enables customers to choose their preferred method of travel with our platform,” Stenger says. “The existing brand awareness of FlixBus has been beneficial to the FlixTrain product and our main vision is to provide mobility for everyone. We are committed to changing people’s mind when it comes to public transport. Our biggest competitor is neither German Rail (DB) nor low-cost airlines but the individual automobile. We are convinced that the market is big enough for several modes and firms in public transport and that we can support the growth of the market itself.”
FlixTrain and FlixMobility’s use of digital technologies is underpinning this approach to optimising timetables and its offer to passengers. With more than 200 developers onboard, Stenger says the core of its business is on the tech side and analysing data to improve the customer experience. Indeed, he says FlixMobility is a market leader for applied machine learning, which is used for network planning and pricing and results in better timetables, optimised transfers and more customer-focused connections.
“This optimisation of our data enables us to display the best options for travel to our customers before they book,” Stenger says. “We are also constantly improving our app for an even better customer experience. FlixBus for instance was the first long-distance bus provider that was integrated into Google Assistant meaning that users of our Android app can conveniently pay for their tickets using Google pay.”
Of course, the nature of bus operation means there is greater flexibility to innovate with timetables than rail, which still offers significant barriers for market entry to new players. FlixTrain’s steady expansion of service is consistent with the approach of HKX and Locomore at the start of their ventures. However, these companies faced significant barriers. Track access and availability of attractive paths, lack of suitable rolling stock, and high infrastructure charges all remain major challenges to new entrants.
While Stenger says he hopes for fair competition with DB and for equal treatment by DB Network when it comes to approvals for new routes, he believes the reality is slightly different.
“Like every other player on the railway market we must share certain information in a standardised process when applying for new routes,” Stenger says. “However, it seems that DB does not welcome FlixTrain as a competitor. The new routes proposed by DB Network are very difficult for private railway providers to operate economically. We now object to this at DB Network and assume that it will be examined by the Federal Network Agency (BNetzA). We hope that the final timetables will then provide a better offer for long-distance public transport.”
FlixTrain, it seems, is set to face a significant challenge over the next few months to secure the foothold it desires to continue its growth and expansion strategy in 2019 and beyond. Certainly, the precedent set by HKX and Locomore in recent times, and Veolia, which withdrew its InterConnex long-distance services in December 2014 in the face of competition from the liberalised long-distance bus market, is that low-margin services are under
constant pressure and ultimately struggle to survive.
FlixTrain, backed by its extensive and growing international bus network, might have the best opportunity yet to buck this trend and offer an integrated travel experience. The early signs have been encouraging. Stenger though is remaining realistic.
“The rail business is one that should not be entered without determination or patience,” he says.