According to Les Echos, the new company “will be born in the worst conditions” as it is likely to haemorrhage customers if freight trains are cancelled during the strike just at a time when it is expected to quickly reach breakeven or face possible bankruptcy.
Fret SNCF has failed to breakeven let alone make a profit despite repeated attempts to reduce costs. Fret SNCF made a loss of €173m in 2018, and Les Echos says that according to its information Fret SNCF will end 2019 in a similar situation. To make matters worse, Fret SNCF could face its own strike in 2020, as it wants to renegotiate working hours to improve productivity.
Fret SNCF will start with €170m in equity plus assets including land, some of which could be sold to cover losses.
SNCF wants to write off some of Fret SNCF’s accumulated debt but, according to Les Echos, it must obtain approval from the European Commission. Les Echos says the EU’s Competition Directorate General will not make any pronouncements on this issue for months, as it must first rule on a complaint lodged in 2016 by competitors regarding illegal state aid.
