After corona, travelers never returned in the same numbers. So NS sees no alternative: tickets are becoming more expensive

The train ticket will become considerably more expensive next year. NS expects to implement a “significant price increase” of more than 10 percent in 2025. The railway company announced this on Tuesday when presenting its annual figures.

This year, NS did not increase the rates, at the request of the House of Representatives. After an adopted motion by the Christian Union, the cabinet made 120 million euros available in December to keep NS tickets as expensive as in 2023.

That is not a structural solution, said CEO Wouter Koolmees during a press meeting at Amsterdam Central Station. According to him, a rate increase is necessary because the railway company is struggling with financial problems caused by the pandemic. Moreover, inflation is rising faster than the price of train tickets.

“NS is still far from financially healthy,” Koolmees said on Tuesday. In 2023, the company suffered an operating loss of 191 million euros. Turnover rose 15 percent to 3.8 billion euros.

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It’s simple, says Koolmees, NS spent more money last year than it brought in. The railway company spent considerably more on personnel and equipment than in previous years. For example, NS hired 870 new drivers and around 1,000 conductors. The company now has more than 20,000 employees.

And the costs keep rising. From 2025, NS will have to pay much more for traction energy, the electricity to run the trains. The current multi-year energy contract runs until 2024. NS paid more than 100 million for traction energy in recent years, rates at the level of 2019 and 2020, before the energy crisis due to the war in Ukraine.

NS’s revenues were disappointing in 2023. Since the pandemic, more people have been working from home, and commuters are less likely to take the train five days a week. The number of ‘passenger kilometers’ – the distance that all train passengers traveled together in 2023 – was 89 percent of the number of kilometers in 2019. Koolmees expects that rail transport will not return to pre-corona crisis levels until 2029.

It is paradoxical, the NS CEO said on Tuesday. “In the short term, we have to pay close attention to costs, because income is still disappointing. Fewer travelers are still taking the train and costs are rising. We must continue to invest for the long term. The train has an important role to play in keeping the Netherlands sustainably accessible.”

Koolmees calls on a new cabinet to give more money to rail manager ProRail. This year, that company is carrying out more work than ever to make the railways in the Netherlands future-proof. Last year, Koolmees made a suggestion to make train tickets more expensive during rush hour. But this ‘rate differentiation’ – intended to spread the crowds during the morning rush hour – met with a lot of political resistance. Koolmees hardly mentioned the lost rush hour tax on Tuesday.

Faltering doors

Former D66 minister Koolmees called his first full year as CEO of NS “turbulent”. Train passengers suffered a lot from disruptions, especially in the autumn. This was partly due to infrastructural problems, such as cracks in a viaduct of the HSL-Zuid near Rijpwetering in South Holland and a serious subsidence of the track in Zeeland.

Furthermore, NS had problems in 2023 with the introduction of the new ICNG express train. The New Generation Intercity is delivered slower than expected. There are also “teething problems” such as malfunctioning doors and software problems. These should be resolved around the summer.

NS now adds two to three new ICNGs to the fleet per month. At the end of last year, sixteen of the more than a hundred new intercity trains were in service. In fact, all new trains should have been running by then.

The slow introduction of the ICNG means that NS will have to continue driving with older equipment for longer. This makes train traffic vulnerable; older trains require more maintenance and NS has a shortage of mechanics. This concerns a few hundred technical vacancies.

Furthermore, the planned rail work at Rotterdam Central Station and Schiphol, among others, went slower than expected. This was also due to a shortage of technicians.

For example, NS scored a poor report for 2023. Of the eleven so-called performance indicators that the railway company has agreed with its client, the Ministry of Infrastructure and Water Management, at least six are below the target value. This could result in NS receiving a fine of 1.5 million euros per missed performance standard.

The three indicators for passenger satisfaction – ‘customer opinion’ of the main rail network (HRN), the high-speed line (HSL, Intercity Direct) and social safety – will follow in March. It is expected that the rating of HSL passengers will be worse than the target figure: 7.4.

In addition to the target values, the contract with the ministry also contains floor values. If NS does not achieve this, as was the case last year for the punctuality of the HSL, the ministry can impose another fine of up to 6.5 million euros. “In the big picture, these are not huge amounts,” NS financial director Bert Groenewegen said on Tuesday. “But such a fine is not a paper tiger. No one at NS wants us to be publicly punished.”

Extra vulnerable

NS continuously struggles with a fundamental question: should we try to run as many trains as possible during work? Or should we simplify the timetable so that it is less vulnerable?

For example, NS and rail manager ProRail are currently trying to have 70 percent of train traffic run to and from Schiphol. One of the two railway tunnels there is closed for maintenance. If NS runs 70 percent of the trains on 50 percent of the tracks, train traffic is extra vulnerable and the consequences are serious if something goes wrong.

The same dilemma occurred in 2022, financial director Groenewegen said on Tuesday. At the time, the railway company suffered greatly from a shortage of drivers and conductors. Trains were regularly canceled as a result. “We stuck to the current timetable for too long,” said Groenewegen. “We should have scaled down earlier. Then train traffic would have become more predictable and reliable for travelers.” Groenewegen, former director of cable company Ziggo and newspaper publisher PCM, is leaving NS after eight years. Tuesday was his last financial presentation.

“At NS everyone always wants the trains to keep running,” says Groenewegen. “That is in the genes of this company. And also at ProRail, by the way. But you notice a change in the company. We no longer try to fit as many trains as possible into the timetable at all times. Reliability is just as important.”

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