Without urgent measure, rail passenger operators face bankruptcy as they are recording over EUR 1 billion in lost income.
AllRail, the Alliance of Passenger Rail New Entrants, has highlighted some measures needed to be taken to ensure the survival of new entrants, as the “COVID-19 is annihilating the viable business cases of many independent passenger rail companies.”
If urgent measures are not implemented, the rail passenger operators face bankruptcy in April, as soon as the business-sustaining costs are not covered. “Urgent action is needed to prevent this from happening,” the association says. Its members are facing over EUR 1 billion in lost income by the end of this year.
The operators need to reduce fixed costs fast while at the same time securing the necessary cash flow to sustain capacity and deliver remaining services during the crisis.
The COVID-19 pandemic has led to an unprecedented crisis for independent passenger rail operators. There has already been over a 90% drop in passengers, particularly in those cases where intra-EU borders have been closed.
AllRail publishes some measures which will help rail operators to face their financial problems.
The association underlines the measures needed to be taken at state level:
– Direct grants to cover lost income, with caps for capital intensive industries being higher than the EUR 800,000 cap stated in the Temporary Framework;
– State guarantees for all existing loans and ability to postpone lease payments;
– Protection of workers from loss of income;
– Deferral of payments of statutory company taxes and social security contributions;
– Ability to refund customers for cancelled tickets
AllRail’s rail operator members need the suspension of charges for state-owned track infrastructure, stations, service facilities and (rolling stock) parking, which are under the direct control of the EU Member State governments. This support should be extended until the end of 2021-because this would help with the economic recovery after the crisis.
In addition, association’s rail ticket vendor members need a reduction in financial deposits paid to all rail operators.
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