Sustaining the rail renaissance

Friday, 7th August 2015

‘Rail is enjoying a global resurgence. Strategy consultant and corporate finance adviser Alex Collart considers what the industry needs to do to maintain its edge over air travel.

Not so long ago, the air route between Madrid and Barcelona was feted as the world’s busiest. In 2007, some 700,000 passengers made the flight every month.

Today that number has declined to 200,000. Since the launch of the Madrid-Barcelona high speed train service in 2008, more than 4m passengers have moved from air to train travel.

It’s just one example of rail’s new dominance over air travel for short-haul trips.

New customers are taking to rail in their thousands – driving new investments, introducing new players to the market, and placing rail high on the agendas of governments.

In part, it’s true, this is a result of disillusionment with air travel: frequent delays, intrusive security and the lack of space, connectivity and complimentary in-flight services.

But rail travellers have also seen their experience improve. With on-board WiFi becoming the norm, customers appreciate the ability to work or just surf the web throughout the journey.

Even if the journey time is technically longer, the journey is effectively door-to-door. The growth of high-speed rail further cuts the travel time differential.

How can the rail industry ensure it remains the favoured option?

As I see it, deregulation of the industry is set to increase competition. New entrants to the market will have the opportunity to create attractive new business models.

Further advances in the high-speed realm will help too. Speeds of up to 320mph will become a reality in the next few years, cutting journey times further.

But I would urge rail operators not to relax and assume that passenger numbers will continue to rise at record-breaking levels.

The wider industry must continue to focus on the customer experience, while continuing to improve safety, operational efficiency and environmental impact.

One of the strongest imperatives is the need to provide connected trains. The demand from passengers is strong – in many cases too strong for the available bandwidth to handle at present.

As any operator will be aware, the availability and performance of WiFi is a dominant feature of any customer survey, and the topic of many inbox complaints.

Connectivity isn’t just a boon for customers. Operations and maintenance teams know the value of being able to track each train’s status and to predict and address any technical issues efficiently.

Developments in condition-based monitoring and maintenance will increasingly help operators to stay in control of their trains and target their resources more precisely.

Technology is one of the critical routes to success. That means partners such as Nomad Digital will play a key role in supporting the industry’s expansion into the mid-century – and ensuring this era of rail renaissance is an enduring one.

Alex Collart

Alex has more than fifteen years of international experience in the telecom, technology and media markets. He has set up a technology focused venture fund and has led several investments for one of Spain's largest media groups. 

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