Elisabeth Lindgren, Vice President of Markets, Corporate Communications & Sales, SJ AB
Speaker, Tuesday 16 April 2013
“It is vital to continue to invest in infrastructure…”
Some 20 years ago, air travel captured the market share from rail travel. But this is no longer the case as SJ in Sweden has gradually recaptured market share over the last decade. Passenger kilometres grew by more than 50%, with a particular robust increase after 2005 – a trend that is partly related to SJ’s transition from a state-run service to a commercial enterprise.
The company created a flexible pricing model that enhanced its profitability, despite a reduction in the lowest prices. SJ reversed the trend and is now one of Europe’s most profitable rail companies. Its all-time high profitability was achieved in 2008 with a 14% return on equity. The incorporated SJ is profitable and has completed a turnaround which has enabled SJ to buy a total of 60 new trains within a 10-year period, and more is likely to come.
In 2009, the decision was taken to completely deregulate passenger traffic in Sweden, and it reached its full effect by December 2011.
Accordingly, SJ’s continued journey will involve meeting competition on the tracks through further efficiency measures and continuing to develop new offers for customers. Commuting clusters, mostly around metropolitan areas, are being combined with new lifestyles. The modern ‘urban’ person switches between modes of transport in an entirely new manner. Bicycle, bus, metro, car, train, plane, commuter train, tram and local rail are all part of the transportation mix of today’s traveller.
We expect the population in our metropolitan regions to grow considerably by 2020 and also in Sweden in general by 2030. With fast growth and development rates, we will reach our capacity ceiling. So regardless of the status of the current rail system, rolling stock and other modes of transport, the railway network needs to be expanded.
When the X2000 tilting train was introduced more than 20 years ago, it dramatically changed travel in Sweden. The train brought higher speeds, point-to-point travel, significant reduced travel times, better comfort and a higher service level, and a focus on the business traveller.
Today SJ needs to respond to market demands and future competitive situations. One way is by upgrading our current fleet. Another track is finding a new high-speed train capable of 250km/h on existing tracks. A new train should once again change the way people travel – in the same way the X2000 previously achieved.
Sweden must also protect and maintain the infrastructure and rail system we have today and it is therefore high time to invest in the future. It is vital to continue to invest in infrastructure in general and the rail network in particular because it is essentially only rail traffic that can solve our growing mass transportation needs, not least in Sweden’s three growth regions around Stockholm, Gothenburg and Malmö.
In most other industrialised countries, high-speed tracks have been built (or are in the process of being built) that can carry trains travelling at 250km/h or more. France was first out and we can see that high-speed trains are an alternative to air travel for journeys up to 600km. When the journey time falls below the two-hour mark, air travel can be replaced entirely, although in many cases the various modes of transport work in unison.
Belgium has four high-speed lines while France has eight. In Italy, there are seven lines. Germany has 10 high-speed lines, the Netherlands has one, Poland two, Portugal six, Spain 12, Switzerland one and there are two in the UK. In total, we can travel on some 6,650km of high-speed rail today, with an additional 250km to be added in the foreseeable future.
High-speed trains are no longer exclusive to the most developed industrialised countries, but rather a solution to transport and environmental problems and a means for driving development in any country. There will of course also be high-speed in Sweden; but it is a matter of time and effort.
Elisabeth Lindgren holds a Masters of Business Administration degree from Stockholm School of Economics and has been employed at SJ since 2007. She has considerable experience as a director and being in managerial positions; within the bank, finance and recruitment sector. In addition to this, Elisabeth has experience with staffing, education, skills enhancement, consulting, down and upsizing.