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SNCF divorces Renfe over fast lines between France and Spain


Written by Frédéric Dubessy on Thursday, February 17th 2022 à 16:00 | Read 269 times



Renfe will no longer operate its trains between France and Spain with SNCF (photo: Alstom)
Renfe will no longer operate its trains between France and Spain with SNCF (photo: Alstom)
FRANCE / SPAIN. On Wednesday 16 February 2022, SNCF decided to unilaterally break off its agreement with its Spanish sister company Renfe to jointly operate trains between France and Spain. This collaboration had led to the creation, at the end of 2013, of a joint venture under Spanish law, Elipsos, responsible for the joint operation of high-speed lines on the Paris-Barcelona, Marseille-Madrid and Lyon-Barcelona routes, with eight to fourteen trains per day depending on the season.

This commercial agreement - each kept its domestic revenues and shared its international revenues and operating costs - is officially scheduled to end in December 2022.

Renfe would have preferred to continue with SNCF. Even though at the end of September 2021 it appointed Manuel Leza, former transport manager of the Basque Country region, as its French market manager. And since 2020, it has had a representative office in France. This is a sign of the company's desire for independence.

With the liberalisation of long-distance rail services in the European Union, the two companies are now in competition with each other on fast domestic Iberian trains since the opening of a Barcelona-Madrid Ouigo by SNCF in May 2021. Renfe is planning a Paris-Lyon-Marseille and a Paris-London route but is encountering difficulties in obtaining authorisation from the French government. The two companies will regain their freedom, both having strategic growth visions in Europe that make the continuation of their alliance incompatible. This is all the more true given that the regional lines (TER) are about to be opened up to competition. Renfe, which plans to generate 20% of its total turnover outside Spain by 2028, is participating in the calls for tender launched by the Hauts de France and Grand Est regions.

Renfe wants to continue cross-border links alone

SNCF justifies its decision by a lack of profitability since the launch of the links operated jointly with Renfe. It explains this by strong competition from air travel (particularly low-cost flights) and the lack of potential customers travelling between the two countries. With the Covid-19 pandemic, the situation has worsened further, with demand for seats falling by 72% in 2020 compared to 2019 and by 59% in 2021 compared to 2020. A return to pre-pandemic levels would not be expected before 2023 or 2024. Financial equilibrium does not appear to be achievable on the Lyon-Barcelona, Marseille-Madrid and Toulouse-Barcelona sections. Only the Paris-Barcelona route could make a profit. The French are therefore planning to take over this link from 2023 on their own account.

For its part, Renfe intends to continue the two Barcelona-Lyon-Paris and Madrid-Marseille routes with Elipsos. It will then have to obtain the agreement of its French partner, which holds 50% of the shares. The Spanish railway company estimates that they have carried 5.5 million passengers since 2013 and believes it can make them profitable by recovering international demand.

In April 2011, SNCF had already terminated its agreements with Italian operator Trenitalia on the Paris Gare de Lyon-Turin-Milan (Le Manzoni and Le Caravaggio in daytime service), Paris Gare de Bercy-Rome-Florence (Le Palatino by night) and Paris Gare de Bercy-Venice-Padua (Le Stendhal by night) routes. In November of the same year, it dissolved their joint venture Artesia, created in 1995 and based in Paris. Since then, the SNCF and Trenitalia have been operating a Paris-Milan service on their own.



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