The liberalisation of high-speed rail services in Spain: Ticket price in the Madrid–Barcelona corridor

Abstract

Current EU regulations and initiatives aim to promote a series of structural changes within the rail sector to improve its efficiency and environmental sustainability. Thus, a liberalisation process has been implemented through the so-called "railway packages". In the case of Spain, in 2021 the Spanish state-owned railway infrastructure manager (ADIF) culminated a long and complex process, initiated in 2016, to replace the existing public monopoly with free market models. As a result, three different companies have signed a ten-year agreement on the provision of high-speed services on the Madrid-Barcelona route, Madrid-East and Madrid-South.By facilitating the entry of new competitors, a reduction of transport costs is expected, which will in turn reduce the charges paid by operating companies. This will benefit rail passengers. In fact, the Spanish high-speed rail network presents, in general terms, excess capacity and low levels of congestion, which makes it easier for new operators to access the infrastructure. Therefore, new rail services will increase by 65% the network's capacity, compared to pre-liberalisation scenario.Given the new highly competitive scenario, the prices and types of tickets are much more complex as they are highly influenced by numerous factors, including internal factors, external factors, competition among rail operators and strategic customers. However, an appropriate ticket-pricing strategy can not only attract more passengers but also improve revenue. Therefore, the main goal of this paper is to analyse the pricing strategy for High Speed Rail (HSR) services in the Madrid-Barcelona corridor, considering the competition among different rail operators.