Nearly two decades after liberalisation, DB still enjoys a 99% market share in the German long-distance passenger rail market. This clearly demonstrates that we need a level playing field for all rail companies in Europe and Germany.
HKX is convinced that a full separation of infrastructure management and rail operations would do much to amend the current situation. In every single case across Europe, vertical integration has been shown to hinder growth and efficiency. We need clear rules and fair regulation, so that investors can be confident that they can operate trains without fear of discrimination by incumbents or their governments.
In addition, the regulatory regime needs attention in a number of areas, particularly regarding access to the infrastructure of marketing and sales. With 43% of tickets still sold at stations, new entrants should also have access to essential sales facilities. This includes the central ticket office, which DB – the incumbent holding company – inherited from the taxpayer.
Moreover, in Germany, the holding company's infrastructure manager and rail operator share exactly the same brand. This means that any time the infrastructure manager uses its brand (the big sign outside every mainline railway station) it is also advertising the holding company's rail operators. This means brand awareness is absolutely critical for new entrants, but how can we possibly match the millions of euros in free advertising that DB's constituent operators receive each year?
The only way to effectively break these historic links and establish a level playing field is total vertical separation of track and train, with the creation of an infrastructure manager that is institutionally independent of the incumbent train operator.
HKX wants to see a genuinely open market for long-distance rail travel, which will allow consumers to take their pick based on price and service while access to sales infrastructure at stations is equal. Only when this has been accomplished can the long-distance passenger rail market be considered truly liberalised.