NEW entrants to the French rail market come in all shapes and sizes. Trenitalia, part of Italy’s FS Group, is now operating high-speed trains between Paris and Lyon, while established contract operator Transdev has secured the first operating contract from a French region not to be awarded to incumbent SNCF and is working to launch in summer 2025 with a fleet of 16 Omneo Premium trains ordered from Alstom at a cost of €250m. At the other end of the scale, the Railcoop cooperative is looking to step into the gap left by the national operator on the Bordeaux - Lyon route with fleet of second-hand SNCF DMUs.
For some this would indicate the French rail market is open to and receptive towards new entrants, but this has not been the case for every company attempting to break the SNCF monopoly. Open-access operator FlixTrain has walked away, and Spanish national operator Renfe has been frustrated by the difficulties in securing approval to operate its Alstom high-speed trains all the way to Paris, despite their obvious French ancestry.
One clear apostle of opening up to competition is Transdev chairman and CEO, Mr Thierry Mallet. At a press lunch held in Brussels on May 11, he outlined a package of measures that Transdev believes the European Union should take to help reduce CO₂ emissions from the transport sector. Currently responsible for only 0.4% of greenhouse gas emissions in Europe, Transdev says rail can play a major role in the decarbonisation of everyday travel, but the key issue is operating costs which absorb large amounts of public money at a time when inflation and interest rates are rising.
Going out to tender for regional passenger services has made it possible to reduce operating costs and increase the number of services. Mallet points to Germany where the cost of operation stands at €15.15 per train-km compared with €25.5 per train-km in France. He says this is due in part to a denser network of regional services operating at higher frequencies in Germany, which enables fixed costs to be spread out over a larger number of train-km, but also to operating practices which have become more up to date and efficient by going to market.
Open-access operator FlixTrain, active in Germany and Sweden but an unsuccessful entrant to the French market, has compiled its own data on infrastructure costs. It calculates the average cost of a long-distance path to be €8.09 per km in France, compared with €7.61 in Germany, €5.82 in Austria, €2.77 in Italy and €1.45 in Sweden.
For a similar conventional train of locomotive and coaches, FlixTrain says that track and station access charges represent over 40% of total costs in France compared with 30% in Germany and 15% in Sweden. “Station fees are high and fixed in France, not reflecting the demand for platform access,” observes FlixTrain, citing the example of Paris Austerlitz where the charge is €1200 per departure compared with €3 per departure in Stockholm. “We must therefore reduce the number of stops to optimise our costs,” the company says. “This is not FlixTrain’s model of making travel accessible to everyone.”
SNCF points out that access charges are the principal source of revenue for infrastructure manager SNCF Network and enable it to finance renewal projects and the day-to-day operation of the national network, including maintenance and safety. “Ultimately, they are what allows the service offered to customers and passengers to be improved,” SNCF says. “SNCF Network alone funds 100% of these activities.”
“Access charges are calculated on the basis of cost analysis and are set according to the capacity to pay of the different markets such as high-speed, regional passenger or freight.”
Track access charges are set in France according to European regulation and under the supervision of regulator ART. “The price of a train path depends on regulatory, commercial and economic criteria,” SNCF says. “Access charges are calculated on the basis of cost analysis and are set according to the capacity to pay of the different markets such as high-speed, regional passenger or freight. Prices are set by SNCF Network for multi-year periods and have been fixed for up to and including 2023, as approved by ART.
“The regulator must be sure that these charges have been correctly set and that they do not prevent the growth of traffic by new entrants or existing operators.”
Furthermore, SNCF says “to encourage the development of new regional rail services, SNCF Network has put in place an incentive system based on a reduction of part of the access charge that applies above a 5% growth threshold. From this year the company has granted operators of contracted services - such as regional TER trains or the Transilien Paris commuter network - a discount on paths requested for traffic above a predefined level, thereby encouraging them to increase the number of trains operated and improve the service offered to passengers.”
FlixTrain believes that track and station access charges in France should be reduced to the level of direct costs to lower the barriers to entry faced by new operators, again pointing to the success of the Swedish model.
This view is shared by Mr Bernard Roman, president of ART. “France has significantly higher track access charges for passenger services than other European countries, with €9.17 per train-km in 2019, versus an average of €4.50 per train-km in Europe,” he says.
“This high level is centred on non-PSO passenger services - €15.9 per train-km on average in France in 2019, more than twice as high as in Germany, Spain and Italy - and is mainly due to the choice made by France to base the coverage of the complete cost of infrastructure management primarily on access charges, whilst other European countries, such as Sweden, have opted for public financing of the fixed costs associated with the network, which is more conducive to the development of passenger services.”
Roman says it is crucial for SNCF Network to shift the high level of mark-ups to cover network fixed costs to the market sector with the highest capacity to contribute.
According to Mallet, the existence of a truly independent infrastructure manager” is crucial to the success of increasing competition. This does not exist in France as SNCF Network comes under the umbrella of the SNCF Group, like the national operator’s train operating business, SNCF Voyageurs.
Transdev highlights the advantages that the incumbent enjoys over new entrants in tendering competitions, having better access to crucial information on the technical and commercial characteristics of the routes going out to tender. “It undoubtedly gives an advantage to the outgoing incumbent operator, discouraging potential candidates from participating in calls for tenders, or at the very least, affecting their ability to submit a credible bid,” Transdev says.
Reinforcing the independence of SNCF Network, and SNCF Gares & Connexions which manages station access, are two of the 39 recommendations made by ART in a report issued on February 16, setting out of the state of play on opening the French passenger rail market to competition and removing the remaining barriers to entry.
“The real, real problem is access to data. SNCF is not very transparent. You have to fight with SNCF to get information.”Thierry Mallet, Transdev chairman and CEO
Specifically, ART says that in the absence of true separation from the SNCF Group, the working of the SNCF Network board should be changed to reduce any influence brought to bear by any other part of the SNCF Group. The independence of the infrastructure manager in matters of organisation and decision-making should be reinforced, says ART, by increasing its role in managing operations and maintenance planning as well as in defining investment policy. Either through their contracts agreed with the French government or through regulatory incentives, SNCF Network and SNCF Gares & Connexions should work under a more ambitious strategic framework that sets more precise targets and provides more incentives for good performance. ART believes that this would benefit the French rail system as a whole.
SNCF points out that SNCF Network and SNCF Gares & Connexions were established as limited companies to ensure their “complete independence” from train operating companies within the SNCF Group. Without entering the details of the ART recommendations, SNCF says “any steps that could help develop rail in the French market are welcome.”
“The more operators there are in France, as in Europe, the more service models there will be and the greater rail’s market share will be, to the benefit of customers, passengers and the planet,” it says.
With particular regard to the independence of the infrastructure manager and financial transparency, Transdev is calling on the European Commission to ensure the proper application of the Fourth Railway Package. “Truly separating infrastructure from operations means there will be no confusion,” Mallet says. “This is not the case in France. When you have a transparent infrastructure manager it works well.”
“Competition with SNCF will make it stronger as it will have to respond,” he adds, suggesting that as the company’s sole shareholder the French government should bring pressure to bear for the incumbent to embrace the new order.
SNCF points out that during any discussion relating to setting track access charges or the allocation of train paths, SNCF Network directors appointed by SNCF Group are obliged to withdraw.
“In the same way, a member of the SNCF Network board cannot be at the same time a director of an SNCF Group railway company active in France,” SNCF says.
“As infrastructure manager, SNCF Network assists all the regions and current and future operators with their transport projects in a fair and controlled manner. To ensure the impartiality and fairness of its decision-making, SNCF Network has since 2020, and in consultation with ART, operated under a code of conduct which is based on three principles: transparency in its dealings with customers under the supervision of ART; fair and non-discriminatory decision-making; and respecting the confidentiality of client data.”
Noting the hostility of rail unions to the change in long-established working practices that competition can bring about, Mallet counters “many people think it’s a good idea.” He points to the example of the Rhônexpress light rail link between the centre of Lyon and Saint Exupéry airport, operated by Transdev, where there is no difference between the drivers and the onboard staff checking tickets. Here, the traditional silos into which railway job functions are placed have been broken down and the driver “caste” abolished.
Lack of information
Getting information from SNCF has been Transdev’s biggest problem as it works to launch express regional services between Marseille, Toulon and Nice at the end of June 2025, under contract to Région Sud (Provence-Alpes-Côte d’Azur), the first of its kind to be awarded in France.
“The real, real problem is access to data,” Mallet says. “SNCF is not very transparent. You have to fight with SNCF to get information.” While it has not been a problem to obtain details of the train paths that Transdev will be able to use in the immediate future, as these paths are allocated to the region, other information is hard to come by, especially on long-term investment projects and what paths will be available in five years’ time.
The difficulties in obtaining information from SNCF have been such that at least two regions looking to tender their Public Service Obligation (PSO) services have been forced to seek redress from ART.
On January 4 2022 ART directed SNCF Voyageurs to provide the Hauts-de-France region in the north of the country with information on 66 specific points, ranging from the general organisation of the TER regional service operated by SNCF for Hauts-de-France to details of rolling stock, fleet maintenance and human resources. This followed an earlier judgment issued on June 17 2021, when SNCF Voyageurs was directed to provide Provence-Alpes-Côte d’Azur with information on 23 specific points, including maintenance manuals for the Regio 2N, TER2N NG and XGC fleets, the annual rental costs for premises used by drivers at stations and the number of drivers deployed at Cannes depot. Perhaps unsurprisingly, making it easier for local transport authorities to obtain the information they need to award contracts for rail services is also one of ART’s recommendations.
“It’s quite hard to get good and clear information,” agrees Mr Charles Billiard, a spokesman for FlixTrain. “SNCF is the source of everything. It is not the easiest thing to do.” Billiard says more transparency would certainly help as a first step. “But the costs will still be too high for FlixTrain to enter the market. That is the main message from our point of view.”
“For over three years, SNCF Network and SNCF Gares & Connexions have been working together to prepare for the arrival of new operators in stations and on the national rail network,” SNCF says. “The two companies are putting steps in place to ensure that access to the French rail network is simple and obstacle-free for these new operators. Current and future customers can find all practical, technical, administrative and charging information relating to the use of the network in the network reference document (DRR) and the stations reference document. These documents are updated every year in consultation with stakeholders such as railway operators and local transport authorities and are submitted to ART for approval.
“Requests for access from new customers are examined, like all others, on a non-discriminatory basis.”
SNCF also says that steps have been taken to simplify the process of gaining access to the network, including by strengthening national and regional SNCF Network commercial teams to make sure closer attention is paid to requests for access. Any potential new client has a dedicated contact within SNCF Network to assist them with their applications while the infrastructure manager has developed services to assist new operators from the project phase, including studies, data and guidance on obtaining access to stations and stabling facilities.
SNCF Gares & Connexions also has dedicated teams to assist new operators with matters such as the display of passenger information at stations, which can have an impact on passenger flows, safety and train punctuality. “These teams also make premises available for restocking train supplies or selling tickets to passengers,” SNCF says.
Lack of rolling stock
Transdev will be operating contracted services for Région Sud, but the difficulties it has encountered are similar to those experienced by FlixTrain, which in 2019 attempted to run five conventional long-distance services from Paris to Brussels, Lyon, Nice, Toulouse and Bordeaux. “We did the maths, and it wasn’t financially interesting or responsible to pursue, mostly because of the infrastructure costs,” Billiard says, stating that track access charges and station access charges are too high in France. He says that rolling stock availability is another big issue with SNCF possessing the only suitable rolling stock “which we couldn’t get hold of.”
“Most of the other companies trying to enter the French market are having the same difficulties getting their hands on rolling stock and balancing their books due to high track access charges,” he says. “SNCF is killing competition. They have the rolling stock, but they will not rent or sell it.”
For its own low-cost Ouigo Train Classique (OTC) service launched on April 11, including the Paris - Lyon route that FlixTrain was looking to serve, SNCF has refurbished 36 Corail coaches, now over 40 years old. However, Billiard is unsure if the new service will make any money. “It kills the competition, and they won’t have to rent or sell the coaches to others,” he says.
Roman agrees that access to railway rolling stock is a real challenge for new entrants as its purchase represents a high entry cost. “To facilitate access to rolling stock, ART recommends promoting the development of rolling stock leasing companies to manage a fleet of trains,” he says. “We also call for the development and structuring of a second-hand market for rolling stock in France.”
“One of the reasons why we are very present in Germany is that there is still room for competition, unlike France where everything is done to limit it and promote public enterprise,” Billiard says. “It is not certain that Ouigo is profitable, on the basis of the prices charged against the infrastructure costs, but it occupies the territory of the low-cost operator with backing from SNCF, and therefore in part the French taxpayer. A 100% private budget operator like ourselves is automatically penalised. In Germany, the national railway does not have a dedicated low-cost service and only offers promotional tickets or discount cards, so prices change according to demand.”
Billiard says that FlixTrain does not know why SNCF has launched Ouigo Train Classique but suggests that in offering heavily discounted fares on these slower, conventional services it is looking to raise fares on their high-speed counterparts and improve their profitability. “They are trying to get everywhere and in every part of the market,” he says. “It’s not very fair to the competition.”
“Unless things change radically, France will not be a priority for us,” Billiard says. Reflecting on Flixtrain’s experience, he notes: “France really has a train culture and it was a really attractive market on paper. But only on paper.”
ART also sees the potential here, stating in its report that France has the second-largest rail network in Europe, but on average there are only 37 passenger services a day per route-km, compared with the European average of 44. With fuel costs rising and the need to reduce emissions growing ever more pressing, the case for removing some of the barriers to entry and growing the French passenger rail market must surely be clear. However, the barriers to entry identified by ART and the prospective operators must be removed if any tangible progress is to be made.