Steam before Wind? Railways try to get back at LCCs

It is a well known fact that the dawn of the jet age was the final nail in the coffin of big rail in the USA. Not so in Europe where Big rail continues to flourish - albeit heavily subsidized by governments as a national resource. In the 1990s it was estimated once that DB lost more money than all the airlines combined. Talk about protectionism.

Similarly the Channel Tunnel and its rail service destroyed the UK-Europe ferry market to a large extent. However the business plan for EuroTunnel and Eurostar did not anticipate LCCs such as RyanAir and Easyjet. It assumed that it would be able to offer fares below the legacy carriers and hence siphon off traffic on lucrative runs such as London to Paris and London to Brussels. With enormous capacity - it should be remembered that every time a Eurostar train leaves the station it has the capacity of 2 747s.

Sadly for the railways this protection did not extend to passengers wallets. With the cost of a rail ticket between London and Manchester north of GBP 200 and rail tickets to Paris from London exceeding even the cost of a business class ticket - the Cross Channel rail services didnt quite reach their potential. Eurotunnel is again at death's door. What is big rail to do?

If you cant beat 'em join 'em. Hoping to emulate the airline alliances many European Rail carriers and Eurostar are going to launch a Frequent Traveller program. Tentatively titled "RailTeam" it will include Eurostar, DB, SNCF, NS, SNCB amongst others. However in much the same way as the South African carriers cried foul when Government owned (and loss making) SAA launched its own LCC - Fly Mango - we can expect to hear from the Euro LCCs on this one. If not then someone should be checking the respective government's check stubs.

Cheers

Charlie and Timothy