Rail competition: Italo's long-distance entry becomes a legal dispute
The railway is taking legal action against the Federal Network Agency's decision to provide more capacity for competitors in long-distance transport. What does this mean for possible competition from Italy?
A legal dispute has erupted as Deutsche Bahn seeks to appeal a decision by the Federal Network Agency (BNetzA) that requires it to allocate more space for competitors on certain rail routes. The German railway company is taking its case to the Administrative Court in Cologne, aiming to clarify the legal basis, proportionality, and practical implementation of the agency's ruling.
The issue at hand is the potential entry of a new long-distance competitor, the Italian company Italo, which plans to enter the German market from 2028 and initially targets two main corridors: Munich-Cologne-Dortmund and Munich-Berlin-Hamburg. Italo has lodged a complaint with the BNetzA, arguing that the way the limited rail capacities in Germany are allocated should be improved to create more competition.
The BNetzA responded by stipulating that the InfraGo, Deutsche Bahn's infrastructure subsidiary, must allocate at least a quarter of the capacity to competitors on certain congested routes with defined capacity ceilings, such as Munich and Frankfurt. However, Deutsche Bahn criticizes this decision, stating that it could complicate the allocation of routes, as operators report conflicts each year over the limited capacities available for freight, passenger, and mixed traffic on the same railway network.
The BNetzA's ruling means that only timetabled services can compete for routes, potentially discouraging any shift away from timetabled services, which Deutsche Bahn argues would make it harder for long-distance operators to compromise on their schedules. While a more competitive long-distance transport sector could lead to lower fares and improved quality, there are concerns that it could disproportionately affect regional rail services and the connections in rural areas.
The German Railway Association warns that the conflict over routes could ultimately harm regional transport and the connections outside major cities. The Association's CEO, Dirk Flege, stresses that a well-organized competition must also ensure adequate service in less frequently used routes. The outcome of the Deutsche Bahn's appeal remains uncertain, and when a judgment is expected from the Administrative Court in Cologne is unclear.
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