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The new president of Renfe faces the foreign expansion and expands the low cost

Date: March 28, 2023 Time: 09:16:14

The new president of Renfe, Raül Blanco, less than a week after his appointment, already has on the table the revision of the company’s Strategic Plan until 2028. In which, as fundamental points, is the extension of the ‘low cost’ networks of the high speed with more Avlo services and the expansion of international activity, which they expect will contribute 10% of the billing for that year.

In a letter addressed to the company’s 16,000 employees on Friday, Blanco conveyed a message of “tranquility and continuity” to add that he was willing “to work hard, add and do everything possible so that Renfe continues to grow, evolve and improve the service we provide to society”.

Review of the 2019-2028 Strategic Plan

Following the resignation of Isaías Táboas over the matter of the Asturias and Cantabria trains, Blanco must conclude the review of the 2019-2028 Strategic Plan, to adjust it to the new scenario in which the company operates, after the liberalization of high speed and the emergence of new operators in 2021, and in which internationalization is a central axis.

In the remaining six years, the Plan must prepare public services (Cercanías and Media Distancia) for the future liberalization of the sector, imposed by the European Union. In this process, the company hopes to go from working as a monopoly to being the reference operator.

At the same time, at high speed, it will have to deal with its competitors Iryo (Italian) and Ouigo (French) and offer a product capable of competing with airplanes, from which it has already lost market share, and with private vehicles.

In this field, the company launched its high-speed and low-cost train, the Avlo, in 2021, which at the moment only operates routes between Madrid, Catalonia and Valencia, but which is called to become a mode that reaches all destinations .

Likewise, Renfe Mercancías -where it already competes with a dozen operators- must be prepared to be a sustainable activity, hand in hand with a strategic partner that provides greater flexibility and logistical capacity to the business, at a time of strong competition.

The International Market

Raül Blanco faces the challenge of increasing international activity, which they hope will contribute 10% of the group’s income in 2028, for which Renfe International Projects has recently been set up.

In this area, the most pressing matter is to resume operations in France, after a year ago the French public railway SNCF decided to unilaterally terminate the company Elypsos, jointly with Renfe, which provided high-speed service between two countries.

The tests of the AVE that will circulate on the Barcelona-Lyon and Madrid-Marseille lines have already begun, which they plan to commercialize before the summer. In the case of Barcelona-Paris, he hopes to obtain the safety certificate to work the line before the end of the year.

This will be the first time that Renfe will operate alone in a foreign country, a movement that it hopes to replicate in other markets, especially in Central Europe, taking advantage of the liberalization of public service obligations (OSP). For this, it has a 50% stake in the Czech Leo Express, which gives it entry into Germany, Slovakia, the Czech Republic or Poland and does not rule out specific alliances in other European markets.

The Arab countries are also in the spotlight of the Spanish operator for its high-speed projects, after the positive experience in the operation of the AVE that connects Medina with Mecca, in Saudi Arabia, which transports more than 350,000 passengers per month ( above the figures for the AVE Madrid-Barcelona).

The project in the United States for the AVE between Houston and Dallas is pending for the promoters to obtain financing with federal funds, at which time the construction of the infrastructure would begin.

The Spanish operator is also participating (in consortium with DB engineering and Ineco) in the Rail Baltica projects, for the operation of the line that will link the three Baltic capitals with each other and with the European network; and Tren MayA, in Mexico, which will be the “shadow operator” of the contracting party, the National Fund for Tourism Promotion.

5.5 billion conversion

The railway intends to speed up the execution terms of the different purchase contracts for new material. It has already purchased 539 new trains, tractor units, and passenger and freight locomotives, with an investment of 5,500 million euros, with which it aspires to have the most modern fleet in Europe within 3 years.

Before 2026, it will put into circulation the 31 trains (amplified to 38) of the contract with CAF for Cercanías, especially for Asturias and Cantabria, which have generated a political earthquake after learning that the designs did not comply with the maximum gauges and the dike caused the dike caused by Táboas and the dismissal of the Secretary of State for Transport, Mobility and the Urban Agenda, Isabel Pardo de Vera.

In addition, 30 series 106 trains manufactured by Talgo are pending receipt, which is approving the vehicles, and the first track tests have already been completed to later put them into high-speed service.

The energy transition falls squarely on the company, the leading consumer of electricity in Spain, and for this it works to source 100% from renewable sources, increase self-consumption and reduce its bill.

In 2022, Renfe, with 16,000 employees, reduced losses by 70%, to 108.6 million euros, of which 95 million were left in the first quarter as a result of the extension of the omicron variant of the coronavirus in those months , which reduced ticket sales by 21% below forecasts.

Puck Henry
Puck Henry
Puck Henry is an editor for ePrimefeed covering all types of news.

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