German rail firm Deutsche Bahn plunges deeper into red
July 25, 2024
Germany's national rail operator Deutsche Bahn made a loss of more than €1.2 billion (roughly $1.3 billion) in the first half of 2024, according to the group's half-year report published on Thursday.
The company has attributed much of the shortfall — far bigger than for the start of 2023 — and the schedule delays to strikes, extreme weather, and advance payments for much-needed infrastructure improvements.
How do the figures look?
Revenue was €22.31 billion in the first half of 2024, 3% below the first six months of 2023, which stood at €23 billion.
However, the news was worse at the bottom line, with a loss of €1.231 billion from January to June. For the same period the previous year, losses stood at €71 million.
Significantly fewer passengers traveled with Deutsche Bahn on long-distance trains across the country in the first half of the year than in the same period last year, the operator said.
According to the group, 64.2 million travelers used long-distance trains in the first six months of the current year — a figure 6% down on the first half of 2023.
Despite the dip in numbers traveling on long-distance trains, passenger numbers were up overall, by 4.2%. Deutsche Bahn noted that the net increase could be down to the popularity of the €49 monthly Deutschlandticket for regional and local routes, which were used more.
Introduced last year, the Deutschlandticket allows passengers the use of all public transport as well as regional and local trains across the country for €49 per month.
What can explain the shortfall?
Deutsche Bahn boss Richard Lutz said the flow of passengers in long-distance transport has ebbed because of a lack of punctuality and network renovations.
He cited weather events and dilapidated infrastructure, strikes, and accidents as reasons for the weaker demand and punctuality.
"Extreme weather events on an unprecedented scale have pushed the rail infrastructure, which was already in need of renovation, to the limits of its capacity and exacerbated the operational and financial situation in passenger and freight transport," said Lutz. "In addition, there were strikes and accidents."
The company expects to be profitable again later in the year — with a one billion euro repayment from the federal government due for line renovations that Deutsche Bahn paid for in advance. In addition, it said, the aim was to become profitable again in all business areas, from freight rail to long-distance transport.
Thousands of jobs to be cut
The operator also said it would slash about 30,000 jobs, mainly in its administration, over the next five years.
"We must achieve more railway with fewer people in future," chief financial officer Levin Holle said during the presentation of the half-year report.
The 2024 UEFA European Football Championship, which took place in Germany between June 14 and July 14, highlighted Deutsche Bahn's problems with train breakdowns and overcrowded platforms making international news, with many football fans affected.
Negative coverage in foreign media was a cause of acute embarrassment for a country that once prided itself on precision, punctuality and top-quality infrastructure.
rc/rmt (AFP, dpa, Reuters)