Italo: Increasing its high-speed rail market share with quality services
Posted: 5 August 2014 | | No comments yet
Despite the economic crisis, the high-speed rail market is currently experiencing a positive trend compared with other modalities – i.e. air, road, and long-distance ‘traditional’ rail, etc. In fact, GDP (Gross Domestic Product) evolution in Italy has been unhealthy during the last two years: -1.8% in 2013 and -2.4% in 2012. But according to Paolo Ripa, Chief Commercial and Operation Officer at Europe’s first private open operator of high-speed trains – Nuovo Trasporto Viaggiatori (NTV) – Italy’s high-speed rail demand increased by 16% in 2012 and 20% in 2013. For Global Railway Review, Paolo explains NTV’s position in the high-speed rail market and highlights the operator’s objectives…
In 2013, Nuovo Trasporto Viaggiatori (NTV) transported 6.2 million passengers – that’s approximately 20% of the high-speed rail market share. For 2014, we forecast to increase our market share to approximately 25% and we will focus on developing the number of international customers.
NTV started service on 28 April 2012 and in only two years of operations we have transported more than 10 million passengers – impressive figures. It is also important to take into account that our competitor in the high-speed rail market also experienced an increase in their number of passengers during the last two years.
The economic crisis in Italy (the country witnessed a decrease of GDP in the first quarter of 2014) – had an impact in many segments of the market and it also affected our passenger’s behaviour, especially in terms of their awareness of high ticket prices.
Overall, the high-speed rail market performs very well – high quality services are offered together with efficiency and these elements show how the competition is good for the market and for Italy, leading to a positive impact on travellers and citizens’ lifestyles.
Italo is the first private operator in the high-speed rail market in Europe and it is a historical point of reference.
Italo’s entrance into the market – after more than 100 years of public monopoly – gives Italian travellers the option to choose an operator. Through this competition, the Italian high-speed rail market witnessed an increase in the quality/price ratio.
Also very important to note is that we enhanced passenger comfort on-board our trains, plus we introduced a new style of welcoming passengers. It is our mission every day to evolve our business, to explore new opportunities and to make our passengers smile. NTV is proud of introducing a new experience of travelling, where every single person is at the centre of our attention.
NTV, and our shareholders, understood that being innovative was imperative if we didn’t want to fall behind and we know that we have to keep on learning and improving our business. We put attention to detail in everything we do and strive to improve our capacity by collecting customer feedbacks and to take note of their requests to satisfy our passengers’ needs on every single trip.
NTV is now concentrating on the development of the business travel market and of international customers. This is the reason why in June 2014 we began operating two new non-stop services from Termini (the main station of Rome) to Milan and vice versa. In December 2014 we will develop our offer with another increase of the frequencies on this important business route.
In order to have a fair competition, from a regulation point-of-view, the Government created a new Transport Authority that took office in December 2013 as an independent Institution.
Competing is hard
Entering a monopolist market with 100 years of history was not easy and, since the beginning, competition has been hard. We know that we have to compete for every single client, but we are optimistic going forward because 10 million customers have already chosen to try the Italo travel experience.
We are also faced with competition from other modes of transportation and it is clear how high-speed rail has changed customer attitudes. In March 2014, the low cost carrier Ryanair decided to cut its Milan–Rome route. Our high-speed rail service now has a competitive advantage to win customers.
Italo offers the most enjoyable travel experience. Our passengers are seated on comfortable leather seats, they can stay connected via the free Wi-Fi on offer, plus they can enjoy the entertainment given via the on-board portal ‘Italolive’. Everything has been studied to make every journey a new and rewarding experience. The train is equipped with soft, reclining, ergonomic seats upholstered in fine Frau leather. Furthermore, to allow the traveller to select the style of the trip they wish, Italo offers four different ‘trip experiences’: Club, Prima, Smart XL and Smart.
Italolive – the on-board portal – is a digital platform that provides not only a selection of the best of ‘Medusa’ films, but also e-books and newspapers in Italian and English plus additional entertainment and news content, all free-of-charge and all viewed from the comfort of the passenger’s seat.
Another innovation compared to traditional railway operations is the fact that the train’s on-board team does not change during the trip, and that the Italo Train Manager is responsible not only for transport and safety, but for all the other activities involving service and the care of passengers.
Staff are equipped with modern palm computers which are used for checks-in for work, controls on-board operations and sales, receives information on passenger profiles, records any anomalies, communicating them in real-time to the maintenance department and remaining constantly connected with the operations centre, in order to receive continual updates on the state of the service and railway traffic.
To make passengers feel welcome, the Italo Service Centre, ‘Casa Italo’, is the heart and listening post that takes into account what all passengers have to say. The centres are located in every high-speed station where Italo stops and they have an interactive frontage equipped with large LCD monitors and automatic ticketing monitors that make it possible to purchase tickets and consult arrival and departure schedules without even entering the centre.
Our high-speed focus
To be more reactive to market trends, NTV is staying focused on the high-speed rail market and in October 2013 our Board decided to reshape our organisational model.
Italo currently offers the best technology of any train service in Europe and we have a service-oriented architecture of our system. AGV is the newest train in the high-speed rail sector, produced by Alstom and it’s the fastest train in the world reaching a world speed record of 574.8km/h set in April 2007.
Bringing cities closer together
Thanks to the high-speed network, cities are now closer: Turin–Milan, Bologna–Florence and Rome–Naples. The reduction in travelling times (for instance Rome–Milan in just 2 hours and 40 minutes) certainly has an influence in increase our modal split.
Train specs and maintenance
The highly articulated architecture of the trains and its distributed traction, which, thanks to the positioning of the engines on the undercarriage, makes the best possible use of the train’s power.
The way the engine system is distributed throughout the entire train rather than just in the locomotive’s front and end, has made it possible to free-up valuable space for passengers eliminating much of the on-board vibration and noise, optimising aerodynamics, guaranteeing more effective safety measures and reducing maintenance costs by 15%.
Thanks to the innovative materials used, along with the modern traction systems and the aforementioned technical solutions, the overall weight-mass of Italo is lighter than that of comparable trains on the market, which results in reducing energy consumption by 10%.
Discovery Channel chose AGV as one of the five ‘wonders’ in the rail transport sector. It is natural to entrust ‘our jewel’ to Alstom which created and knows every single secret of our train.
Thanks to this partnership with Alstom, we have a very efficient and accurate maintenance procedure that optimises the utilisation of our fleet. Check and repair services are carried out in our Nola maintenance depot, close to Naples. It is a state-of-the-art facility that gives jobs to 250 specialised workers.
An investment to provide quality travel
NTV has a major impact on economic and social structure in Italy. More than 1,000 people are employed directly within NTV with an average age of 30 years old. We are proud that Italo is one of the biggest private investments ever made in Italy with over €1.0 billion over recent years. The company invested €90 million in the Nola maintenance depot, €280 million in other operational investments, and €20 million in human resources training.
NTV was born with the objective to offer a new way of travelling: comfortably, environmentally-friendly and modern. This is the reason why NTV is strongly committed to continue its growth in the market with top level quality standards and a high level of customer service.
Paolo Ripa is Chief Commercial and Operation Officer at Nuovo Trasporto Viaggiatori (NTV). He has developed a wide experience in the ‘infrastructure and transport’ sector, where he has worked as a consultant (Cap Gemini 1983-1990) and also held several managerial positions. Paolo has directed various Corporate Functions at Ferrovie dello Stato (1991-2000) and has cooperated in the development of Trenitalia (2001-2007), ultimately taking charge of its Passengers area. Following a period as COO of Aeroporti di Roma, Paolo joined NTV to contribute to the development of the first private operator of passenger transport in the liberalised market of high-speed rail.