Skyrocketing fuel costs and the increasing popularity of the green movement are intersecting to create new interest in an old form of transportation: rail.
Skyrocketing fuel costs and the increasing popularity of the green movement are intersecting to create new interest in an old form of transportation: rail.
In the U.S., ridership on Amtrak is breaking records. The House of Representatives has passed and sent H.R. 6003, a bill that authorizes $14.9 billion over 2009 to 2013 for rail programs administered by Amtrak, the states and the Department of Transportation, to the Senate. In Europe, where rail is much more of a transportation staple, Air France-KLM is considering getting into the high-speed rail business. And everywhere, rail and airline operators are not just looking at ways to compete with each other; they are exploring new ways in which they can cooperate.
The companies that are most often associated with providing information technology and distribution services to airlines are working with rail operators as well. "The time is right for rail, certainly in Europe," Diane Bouzebiba, manager of Amadeus Rail, a business unit of Amadeus IT Group, said. "The high-speed network is growing, security measures are hitting the airlines and the environment is pushing rail to the forefront," she said. "Rail transactions are growing exponentially."
Last month, more than 100 delegates gathered in Nice, France, for the second Amadeus Rail Forum. Among them were the expected rail operators and travel agents, but airlines and car rental companies were represented as well. A major issue that rail operators face is that most companies built and personalized their own internal systems, Bouzebiba said, and their legacy technology is not as flexible as it could be. At the same time, consumers have become accustomed to certain things in the airline world -- electronic tickets, for example -- and they want their expectations met when they book rail.
While some rail companies have made "great investments" in technology, Bouzebiba said, Amadeus believes they shouldn't have to go it alone. It wants to develop the same sort of community model for rail operators that it did for its airline customers. However, Amadeus did not want to approach its rail customers with airline technology dressed up in rail clothing. In June, it acquired a controlling interest in Onerail, a Sydney-based company whose systems are already in use by rail companies in Australia and the U.K. It also has a competency center in Toronto. "Amadeus has been very strong in rail applications for distribution," Bouzebiba said. "OneRail takes us into internal rail systems." Operators will be able to "see" their available inventory, add carriages where necessary, add fare buckets more nimbly and sell reserved and non-reserved seats. "This gives us deep rail experience," Bouzebiza said. "The One-rail team has been involved in the internal workings of railways. We want to support the rail industry, not impose on it. It's rail for rail people by rail people." If there is one thing that the rail industry does not like, "it's not being recognized as rail," she added.
Modernizing systems is particularly important in Europe, where domestic rail is slated for liberalized regulation in 2010, with international rail travel to follow in 2017. Unless rail companies move now, they could find themselves unprepared for head-to-head battle with sleek new competitors such as a high-speed operation between Milan and Rome that is slated for a 2010 launch by a consortium led by Fiat chairman Luca Cordero di Montezemolo and Diego Della Valleda, owner of Tod's, the fashion house.
All seven of the companies involved in Railteam, a collaboration of high-speed rail operators in Germany, France, Belgium, the Netherlands, Switzerland, Austria and the U.K., are Amadeus Rail customers, Bouzebiba said. They are working on the standardization of technology and processes to streamline travel through Europe. For example, a customer traveling today between Paris and Stuttgart will notice that conductor has two ticket punchers: one for tickets issued in France, and the other for tickets issued in Germany.
Addressing such issues as standardization is "an extremely good start," Bouzebiba said, but rail operators also are learning to think about transborder customer service issues. "You might be a very good customer in France, but you're a nobody in Germany," she said. Railteam is working on combining its entire network's frequent rider programs for both "earn and burn" opportunities. So far, four are reciprocal. It also is extending network-wide lounge privileges and other benefits to top-tier members of its operators' frequent traveler clubs.
TTU's special report on rail will continue in the next issue.