Italian Railway Financial Crisis Caused by New COVID-19 Wave
Frequencies being further reduced
Trenitalia will reduce the Frecciarossa frequencies in 28 Italian railway destinations because of the latest restrictions introduced by the most-recent decree announced by Italy Prime Minister Conte which caused a consequent collapse in demand bringing the actual frequency to 67 percent of the pre-COVID-19 offer.
This may just be the first in a series of frequencies cuts, said the AD of Trenitalia, Orazio Iacono, who informed that a plan to arrange the cancellation of an additional 50 trips is under consideration: “This still allows Trenitalia to guarantee 140 frecce [trains] a day starting from November 9, which correspond[s to] 50% of the pre-COVID offer. We are also testing a further third step starting from November 14 which provides for a reduction that would lead to a circulation of almost 78 arrows [trains] per day which correspond to 28%-30% of the pre-COVID offer.”
The pandemic is having very heavy effects on the budget of the FS (Syate Rail System) company. From March to today, according to Iacono, the turnover has in fact collapsed by about 1.5 billion euros, “which projected to the end of the year is worth almost 2 billion euros.”
NTV, the Italo train company controlled by the US fund Global Infrastructure Partners, has announced that from November 10, it will suspend “most of the daily services of its network” and will lay off around 1,300 staff.
The decision was taken in light of the new anti-COVID-19 measures provided for by the DPCM [Ministerial decree] in force: “The situation that is occurring for high-speed transport is identical to that which occurred during the spring lockdown when there was a 99% drop in demand with serious repercussions on the entire sector.”
Today, the company said the drop in demand is “over 90% on long-distance transport across Italy,” but the new limitations to inter-regional mobility “to and from strategic territories of its offer” can only further reduce it. Italo, therefore, “will maintain only 2 daily services on the Rome-Venice route and 6 daily services on the Naples-Milan-Turin route.” It will also use the COVID-19 cig [Cassa lntegrazione Guadagni – the Italian way of coping] more massively than it did during the first lockdown, when cash and solidarity alternated.
At the end of October, the Chairman of NTV, Luca Cordero di Montezemolo, who is still a shareholder of the Group, had made it known that “without an immediate public ai” Italo would close down.
The Relaunch decree in fact provided 70 million for 2020 and 80 million per year from 2021 “in order to support companies that carry out rail transport services for passengers and goods not subject to public service obligations,” therefore including, Frecce, intercity, freight trains of Trenitalia-Fs, and high-speed trains of Italo-Ntv.