DESPITE increasing competition and the absence of a strong economic recovery in Italy, Trenitalia is continuing its positive trend with growth and solid results, witnessed by a stable Ebitda margin of around 26% in both 2014 and 2015. In 2015 passenger journeys almost reached 520 million compared with 512 million in 2014, and passenger-km almost 40 billion while tonne-km increased to 15.5 billion.

With the evolution of EU legislation, the most important challenge facing Trenitalia is the opening of both the passenger and freight markets. Thanks to on-rail competition on the high-speed network in the last few years, Trenitalia has already strengthened its competence and skills in an open-access market and we are fully confident that we will continue to be successful.

Regionali1The local transport business in Italy will be characterised over the next few years by an increase in public tenders that will represent the starting point for an increasingly liberalised market.

Frecciarossa is an outstanding success: we have launched extensive high-speed services which have transformed the way people travel across the country. High-speed services have increased their performance dramatically since 2010, reaching 11 billion passenger-km in 2015 and are expected to improve further in the future.

Despite the open-access market and the presence of a very challenging private competitor like NTV, unique in Europe, the Freccia brand maintains its profitability, with an Ebitda margin of around 35%. On the routes in direct competition with NTV, Trenitalia still retains a market share of around 80%, thanks to our continuing innovation and focus on customer needs.

We pride ourselves on our customer-centric approach, aided by processing data and information to understand our customers' priorities to better shape our offer. This approach led us to replace the traditional two classes of travel with four levels of service on our Frecciarossa fleet, with a service offer that better meets the needs of today's diverse customer base.

We have completely redesigned our product with a dramatic improvement in brand awareness, and we redesigned our approach to staff recruitment for the new high-speed services by selecting people with the best customer-focused attitude. The result is a very high appreciation from our customers which is reflected in our customer satisfaction index results. Our new Frecciarossa 1000 trains, 20 of which are currently in service, is the next step in making our customers happier.

We are strongly committed to digital transformation as we believe this will benefit the company by delighting our customers through their whole travel experience, simplifying purchasing procedures, enhancing our on-board services, and thereby improving business relationships with customers.

Although we have technically achieved the increase in the maximum speed for ETR 1000 trains to 360km/h, as I witnessed recently with a run up to 385km/h during a night trial, we are currently working with suppliers, certification body Italcertifer and the National Safety Authority in order to obtain all the certificates and homologations required for commercial service.

Before the arrival of high-speed, a journey from Rome to Milan took 4h 30min and rail's market share was less than 50%, now it takes 2h 55min and rail's market share is more than 60%. With a maximum speed of 360km/h there will be further significant journey time reductions, and in this situation we expect traffic demand and market share will increase even more.

As far as regional transport is concerned, today we manage 20 public service contracts for local services with the regions and half of them are already secured until almost 2020, either by direct assignments or public tenders as, for example, in Emilia Romagna. We are in the negotiation process for the remaining contracts and we expect to sign new contracts or extend the duration of the existing ones shortly.

The introduction of new direct services between Catania and Palermo in Sicily has been a resounding success. They started in March 2015 with 14 round trips per day, in place of the single round trip. In 2015 we reached nearly 70 million passenger-km, with a load factor of almost 40% and carried more than 1700 passengers per day.

Our intention is to improve the quality of regional services while being aware that, according to the public service contracts, any decision regarding their modification is the responsibility of regional authorities. As in the case of Sicily, we are ready to study the technical feasibility of new proposals and put them in place in the most efficient way.


Turning to railfreight, in the completely open-access market in Italy, Trenitalia's share is around 65%. Road still plays a self-evident leading role, with rail's market share only 10%. The ambitious target defined by the minister of transport to transfer 30% of freight travelling more than 300km from road to rail could be met by improving multimodality between rail, road and sea transport to win new traffic coming from ports as well as through measures intended to favour the use of freight trains, not least for environmental reasons. To this end, it should be a priority to improve connectivity between the different types of infrastructure and to create a more rail-oriented regulatory framework.

The completion of the European TEN-T rail network will be a great opportunity to improve freight transport on safer and less-overcrowded lines. Italy is served by four of the 10 corridors and Trenitalia is ready to take advantage of the new opportunities for international freight transport, thanks to its important position on the three axes: north-south, east and west. We will need to continue to develop our multimodal business, since the four corridors connect the most important Italian ports.

Trenitalia and Swiss Federal Railways (SBB) established a strong cooperation some years ago in order to prepare for the opening of the Gotthard Base Tunnel. We have signed a long-term cooperation agreement to manage international passenger transport jointly in order to improve service quality and comfort. This agreement has already yielded positive results: a recent concrete example is the transport of 285,000 passengers between Italy and Switzerland during Expo 2015 in Milan.

So we have high expectations for the opening of Gotthard Base Tunnel that will reduce the Zurich - Milan journey time from 4 hours to 3h 30min, while the opening of Ceneri tunnel in 2020 will reduce it still further to 3 hours. In order to satisfy new potential demand, from 2017 services on the Gotthard route will be slightly increased with the introduction of two trains per day between Venice and Zurich. Furthermore, in December 2015 we improved passenger comfort on the route by replacing old ETR 470 trains with new ETR 610 Pendolino EMUs. We are working fruitfully with our Swiss colleagues to maintain and improve punctuality even though there are many construction sites along the line.

We also have good expectations for freight: in addition to the increase in traffic that will be generated by the tunnel opening, Swiss transport policy continues to support a shift from road to rail, with a significant road transport reduction target in the next few years.

Regarding investment, in the last four years, Trenitalia has invested around €3.5bn to purchase the ETR1000 fleet along with 250 electric and diesel trains for commuter services.

For the future, Trenitalia recently launched a tender to establish a framework agreement for the purchase of a maximum of 500 electric and diesel trains worth around €4.5bn. The new trains will be used for regional and urban services, supporting those public service contracts that include a provision for new trains. The first order within the framework agreement is for 85 trains for use in Emilia Romagna, as regulated in the tender awarded to Trenitalia.

I can say our main goal for regional and freight transport is to achieve the same results as we achieved in high-speed during the last few years, and we are striving to achieve this in the near future.