Phocuswright Europe: 'Massive opportunity' for rail requires liberalisation of distribution

The Trainline's Champa Magesh welcomed increased in investment and competition in Europe but warned the needs of third-party retailers must be embraced if travelling by train is to rival air

Liberalisation of rail distribution in Europe needs to accompany improved investment and competition to make it a true alternative to flying, according to specialist OTA Trainline.

Champa Magesh, president of partner solutions, told Phocuswright Europe that there is a “massive opportunity” in central Europe but there are no agreed data standards for distribution.

She said rail operators need to embrace distribution, understand the value of selling through third parties and bring in remuneration for the ticket sales they generate.

“Why can’t we have package tours and dynamic packages with rail segments in them? We need fair remuneration, we need open access, but today a lot of that does not exist.

“We welcome that there is a lot of focus by governments in rail driven by the sustainability agenda. There is investment in liberalisation, we’re seeing that in Italy, France, Spain and hopefully Germany.

“But that’s not enough. To have competition with airlines you need to get that to consumers. You need an opening up of distribution.”

Magesh told Travolution that demand for rail is growing with staycationing having grown during the COVID pandemic.

She said investment in high-speed rail in the UK with HS2 and on the continent will see a doubling of passengers by 2030 and a tripling by 2050. In total €126 billion is being invested in high-speed rail.

And competition on key routes, like Barcelona-Madrid where three operators are going head-to-head, is also increasing.

But Magesh said: “Where we need to see more liberalisation is we need to bring in standards and free access to data, we need to be able to distribute the product the carriers are bringing on line.

“We need to be able to reach customers who are choosing to drive or fly today and show them they have the option with rail.

“A platform like ours, or third-party retailer, tour operator or mobility-as-a-service provider, all these organisations have a role to play.”

Magesh said operators in the rail industry have a “legacy problem” thinking they can make all sales through their own app or in station ticket offices.

“We take costs away from the rail carriers. We have to staff our call centres and provide information. We need to be able to provide real-time information to our customers.

“We need to need able to send an alert of there’s a delay. We have access to real-time data in the UK but across Europe that’s not the case in every market.

“There are technical, legal and regulatory challenges in the way that need to be liberalised and open access that allows fair competition in retailing.

“There’s a big opportunity for everyone. Rail carriers should not see themselves as retailers of train tickets, their primary function is to run train services.  

“We are not competition with them, we are trying to position their product on the shelves in a way that consumers find it friction free and see the value in what the carriers are providing.

“We want the rail carriers to see if we can convert just 2% of the people who choose to drive that’s a massive uplift.”

Trainline is demanding the principal of a level playing field for third-party retailers in the UK as part of the Williams-Shapps plans to transform the rail sector.

Magesh said any moves that preference the direct channel would be a “step back in terms of progress”.