Chapter 8: Incumbents and new entrants
In recent decades, the European railway market has undergone significant changes. On one side, EU legislation has pressed governments to open up the market to newcomers; on the other, improvements in technology and the continuous enlargement of networks suitable for high-speed (HS) services have changed railways and consumer perceptions of them. Consumers have increased their demand, with the double effect of eroding the market share of airlines and traditional railway services, while modifying the overall accessibility of places and, thus, residential choices for citizens and businesses. The large-scale investments in HS lines, which are generally far from being completely compensated for through access fees, has led incumbents to reallocate their services to this market segment, thus freeing up capacity on traditional lines. The reduction in regulatory constraints (fares, capacity, etc.) with respect to HS and medium-/long-distance services and changes in consumer behaviour have stimulated the entry of new operators in the rail market in many EU countries. This has mainly concerned traditional services, given the greater availability of rolling stock and human resources, the possibility of accessing public funding for the public service obligation and the opportunity to serve both long-distance services and local/regional services and, in some cases, transnational markets. Entry has often occurred through competitive tendering, especially for regional and local services, and in other cases through ‘open-access’ competition, favoured by the EU pressure for complete liberalization of entry.
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