Can competition bring down train fares? The Trenitalia Chairman's answer
"Trains are far too expensive in France. The key is to open up the market!" It's a remark we often hear, and one that's the subject of much debate. In fact, since France opened up to competition, the question has arisen as to whether the arrival of new operators (such as Trenitalia) is really driving down prices. In this third episode of our special “train fares” mini-series on the Je t’offre un rail ? podcast, after the views of an NGO, et the SNCF Voyageurs' one, it's Trenitalia France's turn to give us its point of view. Established in France at the end of 2021, the French subsidiary of the Italian incumbent operator offers its Frecciarossa on the Paris-Lyon route. Its promise: simple prices, premium quality and... a different vision of the rail business model.
So, can competition lower train fares? Marco Caposciutti (President, Trenitalia France) and Fabrice Toledano (Sales and Marketing Director, Trenitalia France) explain.
For the sake of transparency, we'd like to point out that the production of this episode was financed thanks to Trenitalia France. We can't therefore claim total independence, but we were given carte blanche on the questions and did our best to remain objective, notably by giving the floor to other players with divergent interests such as SNCF Voyageurs (episode to be discovered here).
A business model under pressure: the weight of tolls and fixed costs
What do our tickets pay for?
According to Fabrice Soledano, the main expense item for a rail operator is tolls, which account for 45% of total costs and are paid to SNCF Réseau. A fixed amount, due for each train run, regardless of the occupancy rate.
For a better understanding of this “user fee” model, we refer you to this article !
“Like a car that pays for the freeway, every time a train runs, we pay a fee to SNCF Réseau,” he explains. According to Marco Caposciutti, French tolls are up to 3 or 4 times higher than in Italy.
Trenitalia France's other expenditure items include:
- equipment rental and maintenance (20% of costs),
- personnel (15% of costs)
- commercial, on-board service and communication costs (10% of costs)
- energy (4 to 5% of costs).
A context that makes toll reductions complex
"Studies have shown that lower tolls could help to increase supply and reduce ticket prices. In France, however, the cost of tolls is high", points out Marco Caposciutti. But while Trenitalia once supported the need for lower tolls*, it now admits that the government's budgetary context makes this demand unrealistic. "We understand that the current situation makes such a reduction complex. So we're concentrating on optimizing costs and increasing passenger numbers", explains the president of the French subsidiary.
And this objective is well on track: between 2023 and 2024, Trenitalia France recorded +40% passenger growth between Paris and Milan. Proof, according to Fabrice Toledano, that “opening up to the market enables us to develop our offer and thus attract more people to the train, ”often to the detriment of more polluting modes of transport.
*If you still support this demand, don't hesitate to sign the petition from our association - Les Aventuriers d'HOURRAIL! - to demand lower rail tolls.
The Italian example: when competition lowers prices
Increased supply and lower prices
In Italy, competition on high-speed trains began in 2012, with Italo, an operator that set itself up as an alternative to Trenitalia. The result: prices have fallen by 30% on certain routes (such as Rome-Milan), the offer has doubled, and the number of cities served has risen from 40 to 112! "We often think that high-speed rail only serves big cities. In Italy, the opening up of the network has enabled more regions to be connected," notes Marco Caposciutti.
“We can see that the effects of opening up to competition have been positive both for the new entrants, but also for the historical organizer (editor's note: Trenitalia), since it has brought an improvement in customer service, lower prices and better coverage of the territory!” - Marco Caposciutti
A government-backed model, at the right time
In Italy, rail tolls are used to finance “routine” infrastructure maintenance, while “extraordinary” maintenance is paid for by the State.
The key to Italy's success? A strategic reduction in tolls in 2015, temporarily supported by the State. “In Italy, tolls are now 3 to 4 times lower than in France,” points out the President of Trenitalia France. This has encouraged an explosion in supply (“both for Trenitalia, for Italo and for the other rail companies that have entered the Italian market”). In the end, the Italian rail sector broke even, without subsidies!
What about the environment? The figures speak for themselves: 10 years ago, before opening up to competition, 80% of journeys between Rome and Milan were made by air, compared with just 20% by rail. Today, the ratio has completely reversed (80% by train vs. 20% by plane)!
The situation in France: does competition have a real effect on prices?
Encouraging first signs on the Paris-Lyon line operated by Trenitalia
The Italian example confirms that opening up to competition can bring prices down. “According to figures from multi-operator distributors such as Trainline and Omio, prices on the Paris-Lyon route have fallen by 10%, the only line currently in competition,” enthuses Fabrice Toledano.
But this pricing policy is made possible by :
- an intensive filling strategy,
- a simple, transparent and fully flexible pricing model,
- and until 2024, temporary toll reductions for new entrants.
Indeed, the French Transport Regulatory Authority (ART) has introduced a 3-year toll reduction for new entrants. New entrants have to make major investments to penetrate the French market, to certify their trains, make themselves known, etc.," explains Fabrice Toledano. So this temporary reduction balances out this objective difference in treatment at the start. And it's enabled us to build up our customer base until we reach economic equilibrium."
And when the subsidies end?
No increase is planned, however. Fabrice Soledano is reassuring: "We're keeping our price scale. We're counting on traffic growth to absorb costs."
Territories, accessibility: what commitment to regional planning?
Intermediate stops to connect more than just major cities
Contrary to criticisms of “railway elitism”, Trenitalia emphasizes its policy of local services.
For example, on the future Paris-Marseille line (scheduled for launch on June 15, 2025), stops are planned in Aix-en-Provence, Avignon and Lyon Saint-Exupéry. And on the Paris-Milan line, Alpine stations such as Saint-Jean-de-Maurienne and Houx will be served.
“Our vision is high-speed rail that also connects the regions,” insists Marco Caposciutti. A model already in evidence in Italy.
And tomorrow, beyond Paris?
The operator is already planning to extend its services outside Paris, and even to open connections to Germany (via Munich) thanks to cooperation with Deutsche Bahn. The horizon for this is around 2028-2029, subject to the availability of new trains, for which order books are full.
In conclusion, Trenitalia's message is clear: by opening up competition, it is possible to run cheaper trains, with a high level of service, without public subsidies, as long as we focus on innovation, cost control and increasing ridership.
So could competition be one of the keys to a lasting change? As Marco Caposciutti points out, flexibility remains essential: in services, in prices, and even in train capacity, with the introduction of double trainsets to absorb demand during peak periods.
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