Deutsche Bahn: The railway’s balance sheet: Now there is a threat of a punctuality offensive

As was generally expected, Deutsche Bahn AG once again presented deep red figures at its annual press conference on Thursday. The group loss for 2023 will amount to around two billion euros (before taxes). At the end of 2023, the railway had only expected a loss of 1.3 billion euros. Sales fell by 13.2 percent to 45.2 billion euros.

At the Renovation of the dilapidated rail network fell far short of the desired goals, and the DB Cargo freight division in particular is in an existential crisis. It recorded a loss of 500 million euros; the original aim was to achieve a balanced operating result. The profits of the logistics division DB Schenker also fell dramatically, from 1.8 to one billion euros. According to the plans of the company’s management, Schenker is to be sold.

At DB Cargo, it is not just the negative result that is causing significant problems. The EU competition authority is suing the federally owned company for illegal aid, which is not permitted in the liberalized European market for rail freight transport and could lead to the group being broken up. That’s why it has DB Cargo boss Sigrid Nikutta presented a transformation program a few months ago. As a first step, 1,700 jobs are to be cut at DB Cargo, especially in the Combined Transport (CT) segment for individual wagons and wagon groups, which is to be handed over to other subsidiaries in the group.

The board has announced further measures, which is why the works council assumes that the end of the line for job cuts has not yet been reached. The Railway and Transport Union (EVG) has been campaigning against these plans for weeks, but initial negotiations have not brought any agreement. On Wednesday there was another EVG demonstration in front of the DB Cargo headquarters in Mainz.

Regardless of the group’s worsening crisis, which also includes a new tardiness record (36 percent) in long-distance passenger transport, Deutsche Bahn’s CEO Richard Lutz was optimistic at the annual press conference. Demand in rail transport is increasing and the “largest investment program of all time” has been launched because the “network is too full and too old”. The general renovation should be completed by 2030, and that is the key to “more quality”. This also included extensive digitalization, automation, “attractive future train stations” and AI applications in the workshop area. The plans are fully financed, but subject to “unforeseeable developments in the geopolitical situation.”

Lutz admitted that many people have doubts about the reality of the plans given their experiences in recent years. In order to regain trust, there is a “punctuality offensive” this year to reduce the delay rate in long-distance transport to 30 percent. The “heartfelt thank you” that Lutz addressed to the “dedicated and motivated colleagues who work at the railway” sounded rather cynical. Because employee satisfaction is currently at a low point not just among GDL members. The tough collective bargaining dispute is not over yet. After a total of six strikes and several rounds of negotiations that were aborted without results, negotiations were held again at the top level behind closed doors this week, but no result has yet been achieved.

The “Rail for All” alliance, which brings together trade unions, environmental, nature conservation, transport and youth associations, draws a devastating conclusion for the federally owned company. The consequences of the “large-scale rail customer experiment,” which began 30 years ago with the conversion into a stock corporation decided by the Bundestag, became increasingly drastic, according to a statement. DB’s current balance sheet shows “that only complete non-profit status can provide relief.”

As immediate measures, the alliance is calling for, among other things, a reduction in fares and a simplification of the ticket system. In addition, network capacity must be significantly increased by reinstalling switches and passing tracks that were dismantled as part of “savings measures”. Furthermore, there is a need for “concrete plans for the renovation of existing routes, electrification, route reactivation and significant route expansion in the area.” In return, the federal government and Deutsche Bahn should “stop expensive and climate-damaging large-scale projects.”