Due to Corona, there are currently only a few passengers on the trains. But Deutsche Bahn cannot justify the record deficit solely with the pandemic. The group has to wait for help.

As a result of the pandemic, Deutsche Bahn trains often only have a few passengers.

IIn the second corona wave, fewer and fewer people are traveling on Deutsche Bahn trains. The long-distance trains are currently only used to 20 percent on average, the regional trains 55 to 60 percent. This means that the railway is falling back significantly after its brief recovery in summer. Your economic situation is getting worse: The federally owned company is heading for a record loss of 5.6 billion euros this year. This emerges from the documents for the Supervisory Board meeting on December 9th.

At the first half of the year, the railway had reported a loss of 3.7 billion euros. In its medium-term financial planning, it now calculates a loss of up to 11 billion euros over the next five years. In January and February, the railway had achieved a record increase in passengers and earnings.

In order to compensate for the losses, the federal government promised the railway in the economic stimulus package from June an increase in equity by 5 billion euros. However, the money can only flow if the EU Commission agrees. Bahn boss Richard Lutz and CFO Levin Holle, who moved from the Federal Ministry of Finance to Deutsche Bahn in February, had expressed the hope that the funds would be released in these weeks.

But now there are increasing signs from Brussels that a quick decision in the state aid examination is not to be expected and that the money will not flow until New Year’s Eve. Allegedly, the Commission is considering approving only part of the proposed aid. In addition, they should be made subject to conditions.

Rail competitors criticize preference for the state company

The railroad competitors, who see the commitments as an inadmissible preference for the state company, also provide food for thought for the commission. The rail associations Network European Railways (NEE) and Mofair criticize in a letter to Chancellor Angela Merkel that the planned aid would additionally distort competition. Instead, they are demanding that the money be “channeled into competition-neutral aid such as train-path price reductions”. Otherwise the variety of offers on the railways is at risk.

The railway companies that do not belong to the federal government are also “systemically relevant”, after all they hold more than 50 percent of the market share in freight transport and around 40 percent in local passenger transport. A clear distinction must be made between which corporate losses are the result of the pandemic and which are the result of management errors.

In fact, Deutsche Bahn cannot justify the record deficit solely with the pandemic. The decline in sales due to Corona in long-distance, regional and freight transport has an almost one-to-one effect on the group result in view of the high fixed costs. In addition, there is a high special depreciation at the subsidiary DB Arriva, in which the international business in local transport is bundled, of at least 1.4 billion euros. Furthermore, the railway still has to digest half a billion euros in loss from a further special depreciation and interest.

DB Cargo is slipping further into the red

The DB Cargo freight railway, which has been ailing for years, is slipping more and more into the red. The loss of 350 million euros planned for 2020 had already been reached there by the middle of the year; the negative development has continued. The DB Schenker logistics division made an unexpectedly positive contribution to earnings, benefiting primarily from higher air freight rates during the Corona crisis. However, this cannot compensate for the development in the other divisions.

Although Brussels has not (yet) given a commitment for the state aid, the railway does not yet have to write off the equity injection. The Federal Minister of Finance would rather pay out the money this year than burden the already tense budget planning for 2021 with it. Meanwhile, Olaf Scholz’s draft budget for the railway contains an item of 7.125 billion euros.

In addition to the equity injection of 5 billion, this includes 1 billion euros each, which the Federal Railways had already promised in the climate package of September 2019. Here, too, the amount for 2020 has not yet flowed due to the lack of approval from Brussels. In addition, as can be heard from their circles, the housekeepers are now ready to increase the debt limit of the railway, which has already been exhausted, from a good 25 billion euros to 33 billion euros.