German Railways Report Losses in First Half of 2024
In the first half of 2024, German railways reported a loss of 1.2 billion euros. Strikes, extreme weather conditions, construction sites, and weak demand significantly worsened the results of this state-owned company compared to the previous year, the company announced. The response to the poor business performance is the elimination of around 30,000 jobs over the next five years, said finance director Levin Hol. The jobs will primarily be cut in administration – job cuts have been planned for this year already.
The Future of Railway Infrastructure
In the near future, the railway industry is expected to undergo significant changes due to digitization and automation. This will result in a decrease in the number of employees needed to manage administrative processes, potentially leading to around 1,500 job cuts.
According to industry experts, the goal is to have more efficient railway systems with fewer personnel. This shift towards automation is necessary to improve operational efficiency and reduce costs.
Despite the challenges posed by external factors such as extreme weather conditions, the railway infrastructure must be modernized to meet the demands of the future. The limitations of the current system have been reached, and it is crucial to adapt to new technologies to ensure the sustainability of the railway industry.
Challenges in the Railway Transportation Sector
The railway transportation sector has faced various challenges in recent months, according to Luk, a prominent figure in the industry. Strikes and accidents have contributed to the difficult situation. Additionally, there has been a decrease in demand, with 64.2 million passengers using intercity trains in the first six months of this year – a six percent decrease compared to the same period in 2023.
Intercity punctuality stood at 62.7 percent in the first half of the year, a significant deterioration from the first half of 2023. The target was a punctuality rate of 70 percent. The overall passenger transportation rate in the railway sector was also affected by these challenges, leading to concerns about the future of the industry.
June: A Month of Challenges and Opportunities
June was a month of contrasts, with both challenges and opportunities presenting themselves. In several regions, heavy rains caused flooding, damaging dams and causing landslides that disrupted railway traffic. Almost every train was delayed by at least six minutes, with an on-time rate of only 52.9%.
Despite these setbacks, June also saw the highest sales in the history of the railway, thanks to the European Football Championship. Even logistics company DB Schenker, which had been doing well, struggled to offset the losses in the first half of the year.
Deutsche Bahn expects state support in 2024
Deutsche Bahn, the German railway company, reported an operating profit (EBIT) of 520 million euros. However, this is about 100 million euros less than the same period last year. CEO Richard Lutz expects a positive turnaround, despite operating at a loss before interest and taxes.
The company invested heavily in infrastructure last year, anticipating significant government support in 2024. With a poor half-year balance sheet, Deutsche Bahn is now counting on state assistance to turn things around.
The urgent need for action to improve the railway network
The Minister of Transport, Volker Wissing, is emphasizing the urgent need for action to improve the railway network. He stressed that the railway network needs to be quickly brought to a state that will meet the high demand for both passenger and freight traffic. The German government has allocated financial resources and created a legal framework for the general renovation of the railway network.
Now it’s Deutsche Bahn’s turn to implement the plan. The railway has started to renovate its network by 2030. Maintenance and modernization works are planned to ensure a more efficient and reliable railway system for the future.
Reconstruction of 40 Traffic Intersections Along a 4,000 km Route
A massive reconstruction project is underway to upgrade 40 traffic intersections along a 4,000 km route. The first intersection to undergo renovation is the one between Frankfurt and Mannheim, with work starting just a day after the end of the European Football Championship.
