10 November 2021, Virtual
London, UK - November 2021
London, UK - December 2021
European rail operators could capture a bigger share of European business travel, by both partnering and competing with airlines.
Thalys’ head of sales Jean Pierre Martin told the CAPA aviation summit in Amsterdam that “intermodal” business travel saw the rail operator competing with airlines on short-haul routes.
But at the same time, the train operator has agreements with the airlines such as Jet Airways, Brussels Airlines and KLM to feed those airlines' passengers into their long-haul networks.
Industry consultant Claire Murphy from Bouda told CAPA delegates that rail travel in Europe was hampered by booking platforms and distribution networks that were not up to the same standards as air travel.
“This is a real opportunity for rail companies,” she added.
She illustrated the “tipping point” of four hours where rail journeys compete with air for business travel with a graph of the Barcelona-Madrid route which showed that when the journey took more than around four hours, rail's market share was just 10 per cent.
Following the introduction of high-speed services on the route which reduced journey times to around one hour, market share for rail has climbed to 70 per cent.
Thalys’ Martin said rail operators competed with airlines by having their fares appear on GDS air pages in Germany. He added that a key selling point was capitalising on being able to work effectively during rail journeys, with productive time not disrupted by going through airport security processes.
Deutsche Bahn vice-president Kalle Greven said the operator had a similar agreement for rail fares appearing in comparisons with online travel agency Opodo.
“But still we have a low share of the corporate market,” he said. “Is distribution the reason, or do travellers still have reasons to travel by plane?”
He added that Lufthansa's code–sharing agreement with DB on routes to Frankfurt illustrated a situation where “both air and rail can benefit”. The panel agreed that some short-haul routes were unattractive to airlines which could result in mutually beneficial partnership opportunities.
Silver Rail vice-president Alain van West, moderating the session, said “the last mile” was an important element in a business trip, where travellers may not be aware of the best options. He gave the example of the cheap and quick rail journey from Madrid airport to the city centre, compared to the cost of a taxi fare.
Murphy said examples of content on the GDSs and Opodo were “only scratching the surface” and said fixing distribution hurdles was paramount.
Thalys' Martin said Europe's distribution models were built for national networks, and not designed for international and flexibility. “There's clearly a gap,” he said.