THE Spanish National Markets and Competition Commission (CNMC) has given its approval for high-speed open-access operator Iryo to introduce four new medium-distance services, having found that they would not have a significant economic impact on the PSO contract held by national operator Renfe.

On March 3 2022, Iryo informed CNMC of its intention to provide high-speed services on the Madrid - Cuenca, Madrid - Albacete, Albacete - Cuenca and Barcelona - Camp de Tarragona routes.

These would potentially compete with services operated by Renfe under its PSO contract with the Ministry of Transport, Mobility and the Urban Agenda (Mitma), which runs from 2018 to 2027.

At Mitma’s request, CNMC performed an economic equilibrium test to determine whether the new Iryo services could pose a risk to the PSO contract.

CNMC found that the Renfe’s conventional medium-distance services would not be a substitute for the high-speed Iryo services as they offered longer journey times.

It also found that the Renfe medium-distance high-speed Avant services operated under the PSO contract could be substituted by the new Iryo routes, but only on the grounds of journey time.

CNMC says that the Avant services are more frequent than those proposed by Iryo. In addition, it found that the prices of multi-journey tickets for travel on the PSO services are more competitive than the fares that Iryo is planning to charge.

Iryo had informed CNMC of its intention to operate two services a day each way on the Madrid - Cuenca, Madrid - Albacete and Albacete - Cuenca routes.

The open-access operator was also proposing to offer four services a day in each direction between Barcelona and Camp de Tarragona, from July 15 to August 31.

Barcelona - Camp de Tarragona is the only route where CNMC found that competition would arise with PSO services, as Iryo would offer a lower single ticket price than the Renfe Avant service.

However, the expected impact on Renfe revenue would amount to less than 0.003% of the total PSO contract, which is below the 1% threshold that the commission considers would have a significant impact.

Accordingly, Iryo has told IRJ that it is planning to launch its service to Camp de Tarragona on July 15.

In its determination giving Iryo clearance to operate the new medium-distance routes, CNMC has also required Renfe to provide it with information on its low-cost Avlo high-speed services.

The commission says that Avlo offers lower ticket prices than Avant, and it wishes to determine if Avlo has any effect on the economic equilibrium of these PSO services.

An interview with Iryo CEO, Mr Simone Gorini, appeared in the December issue of IRJ.