70% of Japan’s local railways say pre-COVID ridership won’t return

 Friday, May 5, 2023 


While a number of economic indicators in Japan are returning to pre-COVID levels, along with some listed companies’ earnings, not all are rejoicing. Among those still struggling are local railway operators.

Passenger volumes are expected to remain below where they were before the pandemic at nearly 70% of these smaller operators.

Some are weighing the option of shutting down their train lines altogether and switching to buses.

Nikkei recently surveyed 95 local railway operators — excluding Japan Railway (JR) Group companies, major private railway companies and subway operators — by phone or email.

Of the 68 companies that gave valid answers, 47, or 69%, said railway services would not return to pre-COVID levels. Seven (10%) said they would, while 14 (21%) said they did not know.

Although tourist sites are expected to be crowded during this year’s Golden Week holiday, which runs through Sunday, local train lines are expected not to benefit greatly, as remote work, which has become widespread due to the pandemic, continues to depress ridership.

Depopulation in Japan’s smaller cities and towns is another headache for local railway operators.

Of the 64 companies that answered questions about their operating income in fiscal 2021, all fell into the red that year.

Their combined losses totaled 19.9 billion yen ($145 million).

Although that figure was an improvement over the previous fiscal year’s combined operating losses of 24.2 billion yen, it was still 2.4 times higher than the 8.2 billion yen in red ink seen in fiscal 2019, before the pandemic hit.

An expert panel at the Ministry of Land, Infrastructure, Transport and Tourism has set a transport density of “less than 1,000 passengers” per kilometer per day as threshold for considering the shutdown of money-losing rail lines.

Nikkei’s survey found that passenger densities for 65 respondents averaged 2,140 passengers per day per kilometer, or just 70% of the level recorded in fiscal 2019.

Twenty-eight operators, or 43% of respondents, said there were operating sections of rail line with densities below 1,000, which is just over 32% of the passenger density recorded by the ministry in fiscal 2019, and 42% of the fiscal 2020 figure.

Seventeen companies said all lines of them had passenger densities below 1,000 in fiscal 2021.

On the question of shutting down or a shifting to bus services, 57 companies (86%) said they were not considering that option, while six (9%) said that they may discuss it.

One private railway operator in Japan’s western Kansai region said, “Running a simulation of switching to buses would be useful to consider the need to maintain the company’s rail service.”

Discussions on obtaining public funding for local railways are also underway. The Shiga prefectural government, for example, has begun studying the introduction of a “transportation tax,” in line with its decision to save the Ohmi Railway.

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