A comprehensive study commissioned by the European Commission found that increased competition in the EU’s rail transport market has led to significant benefits for passengers and freight customers, including lower prices and improved service quality.
The report, published by the Directorate-General for Mobility and Transport, examined the impact of market liberalisation on open-access (OA) and public service obligation (PSO) passenger services, as well as freight rail transport. The EU has been progressively opening up its rail markets to competition as part of its broader strategy to decarbonise the transport sector and meet ambitious climate targets.
The study found that competitive pressure has driven down ticket prices in the open-access passenger market, with new entrants employing innovative pricing strategies to attract customers. Simultaneously, service quality has improved, with non-incumbent operators differentiating themselves through better quality services, prompting incumbents to invest in new rolling stock and increase service frequencies. Consequently, demand for rail transport has surged, with railways becoming the dominant mode of transport in some cases.
However, the report noted several barriers to realising the full potential of competition, including access to ticketing platforms, infrastructure quality, and rolling stock availability.
In the PSO market, where competition is introduced through competitive tendering, the study found that the primary benefit has been cost reductions for authorities. Some authorities have passed on these savings to end-users through higher frequencies and improved service quality, while others have prioritised cost reductions.
In the freight sector, the impact of competition has been mixed. While some markets experienced price reductions, others saw stable prices. However, competition has led to an increased focus on service quality and reliability, with non-incumbents focusing on block trains and intermodal transport. The market is also witnessing vertical integration, with shippers and raw material producers establishing their own rail freight operators.
The study highlighted several future challenges for maximising the potential of competition and railways in general. These include the need for infrastructure investments, equal access to ticketing platforms for all operators, and improved interoperability among member states’ railway networks to foster international rail traffic.
The report comes as the EU is pushing to complete the single European railway area, aiming to enhance the sector’s competitiveness and sustainability. The findings are expected to inform ongoing policy discussions on further liberalising the EU’s rail markets and addressing the identified challenges.
The study, conducted by A. De Rose, K. Trier Jørgensen, and N. Doklestic, is available on the EU Publications Office website.
