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Ouigo double-decker high-speed trains at Madrid railway station. AFP
Spain's Renfe to present complaint to EU about cheap ticket prices of private high-speed train operator Ouigo
Public transport

Spain's Renfe to present complaint to EU about cheap ticket prices of private high-speed train operator Ouigo

The French company is planning to roll out new routes this year in Elche and Murcia (5 September), as well as Seville, Malaga and Cordoba in the autumn

Edurne Martínez

Madrid

Sunday, 30 June 2024

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"The complaint against Ouigo will not go before Spain's National Commission on Markets and Competition (CNMC), but before the European Commission". These were the words of the country's Minister of Transport Óscar Puente in an interview on Onda Cero radio. He revealed that state railway operator Renfe is preparing a formal complaint against the French company for its low-prices policy so that Brussels can decide whether this is legal or not.

The minister had already criticised on numerous occasions that the company owned by the French public company SNFC had fallen into a pattern of 'dumping'. This is a predatory pricing policy in economics, such that Ouigo was offering train tickets so cheap that they dragged Renfe down to "very bad results". Ouigo has always replied by arguing that its low-cost pricing policy is valid in other countries where they are present and that they do not work at a loss, something that Renfe accuses them of doing. "It is an economy of scale that we transfer wherever we go, it works with occupancy rates of 90% like the ones we have, it is a commercial success in all the countries where we have been present for ten years," said the company's general director, Hélène Valenzuela, during its launch of the new rail route between Madrid and Valladolid at which it announced tickets priced at one euro.

"We are working on it, the complaint is being prepared for practices that go against the free market that we have all agreed", stated the minister, adding that it is Renfe who is working on it. Asked if Ouigo can do anything to avoid this complaint, Puente said that these are business practices "that have already happened", so now it is up to the European Commission to decide on them.

After learning of the minister's intentions, Ouigo has insisted on its "confidence in the functioning of our business model" and is "calm" about the impending complaint. The French company insists that its business model "has made it possible to democratise high-speed rail in Spain" so that "more and more people can travel by train, the most sustainable means of transport." The company also mentioned that, in addition to consolidating the destinations they already connect to, new routes are planned for this year in Elche and Murcia (5 September), as well as Seville, Malaga and Cordoba in the autumn.

Slashed ticket prices by 40%

A recent report by the CNMC competition watchdog revealed that the new high-speed train private operator had slashed ticket prices by 40% during 2023, forcing Renfe to cut theirs by 25%. Naturally it was the busiest lines where the drop in prices was most noticeable in 2023. The Madrid-Barcelona and Madrid-Valencia routes were 40% cheaper than in 2019 before the pandemic broke out. The first operator to compete with Renfe entered this market in 2021, namely the French company Ouigo, followed shortly afterwards by the Italian company Iryo. To give an example, the current pricing war means that you can travel today for 37 euros on average from Madrid to Barcelona, and 22 euros for Madrid-Valencia.

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