Dutch Railways NS continues to struggle to win back passengers. Passenger numbers are still well below pre-corona levels, making NS loss-making again in the first half of the year.
Whether NS will win back passengers in the coming years and sell enough tickets to cover all operation costs remains to be seen. For instance, the Dutch government wants to liberalize the railways further, although NS may introduce a rush-hour charge from 2025, a measure that will undoubtedly meet a lot of resistance.
200 000 fewer passengers
According to NS, about 1,1 million people take the train on an average working day. Before the pandemic, the figure was still 1,3 million passengers. It is a lot quieter on Dutch trains, especially during the week, and more specifically on Mondays, Wednesdays, and Fridays.
“The rail sector is operating in a difficult period with changing travel behavior,” says CEO Wouter Koolmees. “The Netherlands travels by train more often again, but we still have substantially fewer passengers than before Corona. We also see this reflected in our financial performance.”
Loss of €26 million
NS saw a financial recovery in the first half of the year compared to a year ago. Revenues excluding government support rose from 1,3 billion euros to almost 1,9 billion euros.
The so-called operating loss was reduced from a minus of 225 million euros to a loss of 26 million euros. However, the company says this is “still insufficient for a financially healthy NS”.
The coming years will, therefore, remain “financially challenging”, according to the company. The company is struggling with a debt of 1,8 billion euros.
No reliability, staff shortages
In recent years, many NS trains were down due to staff shortages and breakdowns, among other reasons, which does not increase train reliability. NS, meanwhile, has otherwise managed to reduce the need for conductors and drivers. More than 2 700 colleagues have been added recently, NS says.
Still, some of the train passengers who have not traveled by public transport since the corona pandemic will not return, says Erik Verhoef, professor of transport economics at the Vrije Universiteit Amsterdam (VU). According to him, many train passengers have looked at alternative transport during the pandemic, such as buying a car or an e-bike. Plus: many companies want to become more sustainable and allow employees to work from home more often.
According to the Knowledge Institute for Mobility Policy (KiM), it could take until 2025 before Dutch railways are as busy as they were before the pandemic.
New management agreement
Meanwhile, NS and the Dutch government are negotiating a new management agreement for 2025-2033. According to De Volkskrant newspaper, except for Brussels, NS will lose exclusive rights to international destinations, such as Berlin, Frankfurt, London, and Paris.
However, NS would be allowed to introduce a rush-hour charge, meaning higher travel fares during rush hours and cheaper tickets during off-peak hours. NS wants to raise the rush hour price by dozens of percent from 2026. According to Koolmees, occupancy rates in the morning rush hours are far too high, sometimes exceeding 100%, while over the whole day, occupancy is less than 30%.
More expensive tickets
The NS would also be allowed to make train tickets more expensive by more than just inflation. This would be a one-off additional increase of up to 7%. NS would also get an annual subsidy of 13 million euros from 2025. It would also not have to pay 86 million euros annually for the concession that allows it to run on the track.
Although the European Commission is still threatening to stop that concession deal. After all, the EC has started proceedings against the Netherlands for privately awarding NS the main rail network concession. With that contract, the Netherlands is violating European competition rules, according to the EC.