RegioJet starts on the right track

Bright yellow RegioJet trains made their debut Sept. 26 as the first competitor to Czech Railways (ČD) with the launch of a long-haul Prague-Ostrava-Havířov route. RegioJet representatives say their service is more comfortable for passengers, but still efficient enough to operate without state subsidies on routes that ČD currently controls only with government support.

RegioJet is a subsidiary of Student Agency, a company well known for its network of inexpensive bus routes. Student Agency representatives say they will provide better service and more amenities on their trains to passengers, all while guaranteeing prices equal to or lower than ČD, a claim ČD responded to by promptly lowering prices on major routes and lauding their own recent service improvements.

Since the launch of that service, RegioJet has come forward with more plans to expand onto other long-distance railway routes, and Student Agency director Radim Jančura wrote to the Transport Ministry saying the carrier group would like to take over running half of the long-distance EuroCity (EC) and InterCity (IC) trains on the Prague-Brno- Břeclav line starting in December 2012, before eventually moving on to operate all EC, IC and express trains in the country - all without state subsidies. All of those routes are currently operated by ČD, which is provided subsidies by the state based on "provable losses."

"The story of the economics of our company is completely different," said RegioJet spokesman Aleš Ondrůj. "We do not pay a lot of people who are not needed. Our costs are carefully watched, and we are not connected to any state-owned lobby groups, and we don't spend money on things that don't attract customers, like useless sponsorships."

RegioJet now has three trains running daily in both directions between Prague and Havířov in northeast Moravia, and the company plans to add two to three more trains by the end of October and nine in December, including one to Žilina, Slovakia. ČD will also be faced with competition from Leo Express, another carrier company planning to launch service on the Prague-Ostrava route next year.

Daily sales so far have been between 80 percent and 90 percent of capacity on RegioJet trains, or between 1,100 to 1,300 passengers per day, Ondrůj said. By the end of December, he expects the trains to transport between 3,000 and 4,000 people per day.

In response, starting Oct. 3, ČD lowered ticket prices up to 30 percent for fast train connections from Prague to Brno, Ostrava, Zlín and Hradec Králové in a move Student Agency says is an abuse of monopoly power and state subsidies.

"We have been expecting they would introduce some customer-quality concept," Ondrůj said. "At the moment, more than 1,000 passengers per day are leaving ČD for RegioJet."

Where ČD maintains a competitive edge is with the speed of their trains, which can run at 160 km/hour, compared with other trains that run at 140 km/hour, and in September ČD began offering enhanced service on selected Prague-Ostrava trains, like newspapers and refreshments for passengers, as well as a taxi service with guaranteed rates at select destinations.

"The Czech rail market is being gradually liberalized, and Czech Railways is ready to succeed in a competitive environment. For our customers, it will be a fairly competitive fight. We are investing heavily into modernizing our fleet, and passengers are responding to the changes already, which is reflected in sales growth and confirmed in customer satisfaction surveys," said ČD spokeswoman Kateřina Šubová.

Following the announcement of RegioJet's launch, ČD Deputy Director Antonín Blažek was quoted as saying the increased competition on lucrative routes would force ČD to neglect smaller regional routes, a statement Šubová said was "misunderstood."

"He wanted to emphasize that, in comparison with current competing companies like RegioJet, ČD will have a much more difficult position because we are a network operator that is responsible for 7,000 trains daily, and we have to devote ourselves to improving quality throughout this network," she said. "Currently, the focus will be on the Ostrava-Prague track, but that does not mean we will do that at the expense of other regions. We need and want to gradually improve the quality across the whole country."

Cat Contiguglia can be reached at
ccontiguglia@praguepost.com