German rail operator Deutsche Bahn (DB) is set to cut 30,000 jobs over the next five years after posting a net loss of €1.2 billion for the first half of 2024.
The state-owned company blamed the condition of Germany’s “failure prone” rail infrastructure, strikes and severe weather for the massive financial loss, which compares to a loss of just €71 million in the first half of 2023.
Deutsche Bahn Group’s revenue for the period dropped by 3 per cent year-on-year to €22.3 billion for H1, with net capital expenditure rising by around 35 per cent to €4 billion during the first six months of 2024.
The job losses are expected to come mainly from administrative areas of the company, with around 1,500 redundancies likely to be made this year.
DB’s CEO Richard Lutz said: “Unprecedented extreme weather events have stretched the rail infrastructure, which was already in need of a modernisation, beyond its limits, and worsened the operational and financial situation in passenger and freight transport.
“On top of that, there were strikes and accidents, such as the one that happened at the Raueberg Tunnel.”
Lutz added that the weather “dampened demand” for long-distance rail as well as impacting punctuality for these services.
“Despite these challenges, we want to return to generating an operating profit in 2024 as a whole,” stressed Lutz. “Therefore, in addition to modernising the infrastructure, we have also introduced short-term measures to stabilise the operational and economic situation.”
DB faced a series of damaging strikes by train drivers earlier this year. Although a pay deal was reached between the two sides in March, this industrial action still cost the train operator around €300 million.
The company said it had implemented “a strict spending monitoring and control programme” for its core rail operations in a bid to save money.
Chief financial officer Levin Holle added: “All business units in the Integrated Rail System must become profitable again. To do this, we need to significantly improve our cost efficiency.”
Despite all these factors, DB Group said it was still expecting to make an operating profit of about €1 billion for the whole of 2024, with total revenue for the year forecast to be around €45 billion, which would be on a par with last year’s revenue performance.
The company’s finances will also be boosted in the second half of 2024 by new support from the German government for infrastructure maintenance expenses.
DB also revealed that 64.2 million passengers used its long-distance trains in the first half of 2024 – down by 6 per cent on H1 of 2023. But the company added that since strikes ended, passengers have “returned to trains in large numbers”, with June recording record monthly revenue for the long distance business unit.