Suggesting customers should not buy your products is a strange marketing strategy.
But Marjan Rintel, chief executive of KLM, is unlikely to lose her job over comments made in the Financial Times last month that passengers should forgo polluting flights in favour of the train on certain journeys. In fact, she is taking little business risk at all. She may even have hit on a smart strategy to free up new avenues for her carrier’s future growth.
There is little debate over which is the cleanest mode of transport. Trains are at least 12 times more energy efficient per passenger than air travel, according to the International Energy Agency. Even accounting for all the infrastructure involved in European rail travel — laying tracks, lighting stations and so on — it remains by far the more environmentally friendly option, according to numerous studies.
But switching all intra-EU air passengers to rail is unrealistic. Take the Berlin to Munich route — just over an hour by air and close to five hours on a high-speed train. A study by Oxera found that based on current schedules and capacity, only 26 per cent of air passengers on that route could be accommodated on trains. And then there is the question of the extra time that travelling on Europe’s rail network would require for many journeys. Roughly half of all air journeys within the EU would take eight hours or more by train.
Europe may have a very good rail network connecting many major cities, but if trains are to compete with planes, only high speed rail will deliver the journey times that make this a realistic alternative for the shorter routes. Yet the European Court of Auditors in 2018 described Europe’s HSR network as “an ineffective patchwork of poorly connected national lines”.
These and other obstacles, such as the scarcity of low-cost train operators, a complex ticketing system and the absence of point-to-point baggage handling services are all deterrents to passengers seeking to integrate train travel into international journeys.
In fact, according to consultants Roland Berger, even if these obstacles were overcome and all air journeys of less than 1,000km were transferred to rail (adding some four hours to the trip), the carbon savings for aviation would be less than 5 per cent.
So Rintel’s suggestion appears to be relatively benign for KLM’s business model.
Yet if legacy airlines such as KLM are clever about integrating rail into their offering, and if they can bring their expertise in ticketing, customer loyalty programmes, fare management and ancillary services to the rail sector, they may open up other opportunities.
For example, while many short-haul routes are important to legacy airlines to feed passengers on to their more lucrative long-haul flights, they are not profitable for many flag carriers on their own. “They are just a means to an end,” says one airline executive.
The competition on these routes, largely with low-cost carriers, “is much more intense and legacy carriers have of course a higher cost base”, says Rico Luman, transport analyst at ING. “Indeed, shortages — including on limited airport take-off and landing slots — still matter.”
So if airlines have a stake in getting passengers to their hubs by another route, with seamless ticketing and check-in services to smooth the journey, they can then use the slots that have been freed up for more lucrative services. Seven of the top 10 revenue-generating routes in the world are long-haul international flights, according to OAG. For KLM, it is particularly urgent to make better use of their slots, given that the Dutch government has ordered the number of flights from its Schiphol hub to be cut by more than 10 per cent to 440,000 a year to reduce emissions.
But KLM is not the only airline to be exploring closer relationships with train operators. Lufthansa, Austrian Airlines and others have been doing the same. Deutsche Bahn has even become the first non-airline member of the Star Alliance of airline operators, which jointly market flights and connections across their networks.
“Airlines could get people to book rail tickets through them and perhaps take a commission. It could be a nice way to make a bit of money,” says Robert Thomson of Roland Berger. But it could also be a useful tool against low-cost competition on crucial feeder routes — assuming the airlines and rail operators can get the service right.
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