Friday, March 22, 2024
Rising construction, energy, and labor costs, coupled with increased interest rates and multiple labor strikes, led to a substantial financial loss for the German state-owned railway, Deutsche Bahn, last year.
Deutsche Bahn reported a significant loss of €2.4 billion ($2.6 billion) in 2023, a stark increase from the previous year’s €200 million loss, as announced in Berlin. During the same timeframe, the railway’s revenue declined by 13% to approximately €45.2 billion.
The railway attributed its considerable operational losses to upfront expenditures on major future infrastructure projects, anticipating reimbursement from the German government within the year.
In an effort to address urgent infrastructure needs, Deutsche Bahn allocated approximately €7.6 billion of its funds in 2023.
The rail network experienced severe congestion and deterioration, leading to widespread delays. Nearly one-third of long-distance trains ran late last year.
In response, Deutsche Bahn and the German government have committed to historic investment levels to rehabilitate and enhance the nation’s rail infrastructure.
By 2030, plans are in place to upgrade 40 critical rail corridors. Initiatives begin in July with the comprehensive closure of the 70-kilometer Riedbahn corridor between Frankfurt and Mannheim for nearly six months, aiming to improve network reliability.
Deutsche Bahn projects an increase in long-distance service punctuality from 64% to at least 70% this year. However, extensive construction and renovation efforts are expected to temporarily exacerbate traffic delays.
Despite these challenges, rail transport demand remained robust, with approximately 1.8 billion trips recorded in 2023, marking a 5.8% increase from the previous year.
The German government aims to double rail passenger numbers by 2030 to decrease reliance on personal vehicles and fulfill climate commitments. Yet, ongoing performance issues and delays pose significant obstacles to these objectives.
To support rail network modernization and expansion by 2030, the government has committed approximately €27 billion, with an additional €3 billion from Deutsche Bahn. However, with Deutsche Bahn estimating a total need of around €45 billion, negotiations continue on financing the required improvements.
Earnings before interest and taxes (EBIT) dropped to nearly a €1 billion loss in 2023, a decline from the prior year’s €1.2 billion positive outcome. Deutsche Bahn anticipates a return to profitable operations this year.
Facing approximately €34 billion in debt, Deutsche Bahn is considering the sale of its profitable logistics division, DB Schenker, to generate capital.
Sunday, April 28, 2024
Sunday, April 28, 2024
Sunday, April 28, 2024
