Passengers win in rail travel price wars

In the final quarter of 2023, Spain’s high-speed rail sector witnessed a dramatic transformation, with passengers emerging as the winners.

Following the entry of Iryo and Ouigo, two new competitors in the high-speed railway market, there was a notable decrease in ticket prices by up to 40 per cent.

The change primarily affected routes from Madrid to Barcelona and Valencia, areas previously served exclusively by Renfe.

Competitive pricing fuels growth

Data from the National Commission of Markets and Competition (CNMC) highlighted that this price reduction was universal across all corridors when compared to the same period in 2022. Travellers could now journey from Madrid to Barcelona for an average of €37 and reach Valencia for just €22.

Ouigo emerged as the most budget-friendly option to Barcelona, offering tickets at an average of €37 . Iryo followed with prices around €43, and Avlo, Renfe’s budget service, charged about €44.

For Valencia-bound passengers, Ouigo and Avlo presented the lowest fares at €22.5, with Iryo’s tickets costing slightly more at €25.

Passenger numbers on the rise

This reduction in fares necessitated a price adjustment from Renfe’s AVE trains, which dropped their rates by 20 per cent to €62 for Barcelona and by 23 per cent to €38 for Valencia.

Coinciding with these price cuts, passenger volumes swelled by an average of 29 per cent across all routes, totalling close to 8.5 million.

Significant growth was observed on the Madrid-Alicante and Madrid-Sevilla lines, witnessing increases of 53 per cent and 44 per cent, respectively. The average ticket price to Alicante fell to €25, and to Sevilla to €38.

Market dynamics

Despite the competitive pressure, Renfe Viajeros maintained a dominant market share, capturing between 50 and 76 per cent of travellers.

Iryo carved out a niche with 25 to 30 per cent market share, except on the Madrid-Alicante route, which it served from Thursday to Sunday.

Ouigo consistently held a 21 per cent share across several corridors and plans to expand to Valladolid, Murcia, and Andalucia.

The freight transport sector experienced a slight upturn of 1.4 per cent in net tons transported compared to the previous quarter. However, this did not offset the summer’s downturns, with year-on-year metrics showing a decline.