Competition gives green light to a competitor in the AVE to Barcelona

Competition gives green light to a competitor in the AVE to Barcelona

Renfe alleges that this is the objective of Air Nostrum, but the CNMC authorizes it to understand that its "vocation" is the international connection with France

   The National Commission of Markets and Competition (CNMC) seems to have found the way to open high-speed rail services to the free market by December 2020, when the EU deadline for all its states ends. This Monday gave the green light to a project led by the regional airline Air Nostrum, which aims to cover the route Madrid-Montpellier (France).

  Its main reasoning is that the new service "meets the mobility needs of users", while it is "positive" for "current and potential" travelers on that route. But what does the Intermodality of the Levante (ILSA) society really pursue, where the airline is open to have more partners? For, as all the actors, including the CNMC, ultimately recognize, it is to compete with Renfe, one on one, precisely in the most profitable corridor of the AVE.

The problem, as the passenger subsidiary of the public railway operator highlights in its arguments, is that neither this route nor other high-speed nationals "are still liberalized" and at the Ministry of Development there are no plans at this time to Anticipate the EU deadline after the frustrated opening in 2016 of the Madrid-Levante corridor. That is why ILSA has resorted to asking for permission to operate the Madrid-Montpellier international line, since these services are open to competition since 2010.

In the opinion of Renfe Viajeros, it is a "contrived prolongation", but the Commission understands that it complies with the regulations even though in this case it has been somewhat generous with ILSA. To consider an international route at least 30% of its income must have such origin and, in addition, 20% of the kilometers carried out in another country - here they represent 19.7%, lacking 2.5 kilometers on a total route of 968.7 kilometers-.

The argument of the CNMC not to be so "strict" in it, in addition to ILSA has committed to provide data each month to see if it meets other limits (number of domestic travelers, origin of sales ...) is that there is a potential international demand "sufficient for the service". He adds that his "vocation" is precisely that -Competition will monitor the marketing strategy and the advertising messages that the company launches for that purpose- and that there will be a double benefit for end users: travel times will be reduced by 10% compared to what Renfe now offers (five hours and 47 minutes), the frequencies will triple with France (50% from Barcelona) and the tickets will be cheaper (now they cost from 67 to 189 euros depending on when they are purchased).

No clear start date

It remains unclear when the Renfe competitor would begin to operate. In its initial plan, it plans to start operations on October 5, but it still does not have rolling stock. That is another of the criticisms of Renfe, in addition to its "eventual and very dubious profitability" -something in which the CNMC does not enter because it is not in its attributions-, which accuses of "lack of impartiality" to the supervisor of the market.

The Commission replies that its subsidiary of train rental has "certain obligations" and that it can adapt "old" AVE trains. Another thing, he admits, is how late and what it costs, extremes to negotiate with ILSA.