Deutsche Bahn can only survive as a company because the federal government is responsible for its debts. They’re getting more and more. If the taxpayer didn’t step in, Deutsche Bahn would never be able to afford the nine-euro ticket.
If you want to find out something about the mood of Germans when it comes to trains and the nine-euro ticket, you can go to the “Trustpilot” rating portal: “I booked the nine-euro ticket for my mother as a surprise,” writes a disappointed one Customer.
“Unfortunately, a friend did the same for the same month. Now I wanted to at least ask if one of the tickets could be changed. But the customer service employee was totally bored: exchange was impossible. I think you could do something to accommodate your customers in such cases. But it’s always about the money…”
The lady is right. The railways are all about money, and that’s because this money is theoretically missing – but practically unlimited. Theoretically, the railways have long been broke, but in practice no country can afford a railway that stops because of over-indebtedness. Certainly not Germany with its climate goals. That is why billions of euros in tax money flow into the state-owned company.
With the nine-euro ticket, it will probably be another 2.5 billion more – just for the three summer months for which the ticket is available. In any case, the federal government also pays that much to the states that order regional transport from the railways and pass on the money accordingly. The leisure fun that a ticket that is valid in the main holiday season is obviously about is expensive fun that the train itself could not afford.
The state-owned company, whose IPO was allegedly postponed 14 years ago because of the financial crisis but was actually postponed until the end of the day because of poor key figures and a miserable reputation among customers, went deeper into the red during the Corona crisis than ever before in its history .
All in all, a minus of 5.7 billion euros piled up in 2020. And that value has solidified ever since. At the same time, the company’s debts shot up by five billion euros within a year and are now hovering around the 30 billion euro mark.
If Deutsche Bahn had ever become a listed company, the share price would be in the basement today. Among other things, analysts pay attention to the degree of indebtedness in their assessment. What is relevant for them is how long it would take for a company to pay off its debts. Five years or more is considered a critical repayment period. This bar has also broken the track, but nobody cares, because ultimately the federal government is responsible for the lousy.
It’s true: the pandemic has exacerbated the outcome. The reasons for the red figures, however, lie elsewhere. Even before the Corona crisis, Deutsche Bahn was suffering from massive problems and was no longer able to finance its investments from its own resources.
Money should come in through the sale of the foreign subsidiary Arriva, in which local transport in Europe is bundled. But Arriva proves to be a slow seller, so far nobody wants them. In rail freight transport, the former almost monopolist has lost more than half of its market share.
Construction sites on the rail network produced so many traffic jams that customers looked for other transport options. This Monday, three days before the nine-euro ticket goes into effect on June 1, Deutsche Bahn boss Richard Lutz had to publicly admit to the situation on the rail network: “We are facing a turning point. Things cannot go on as before.”
He speaks of “growing pains”. In fact, however, the patient is only alive thanks to the constant infusion of fresh money. The dose he needs is now increasing again because of the nine-euro ticket.
Debt had also increased in 2019, i.e. before the Corona crisis. At that time, the railway posted a passenger record. According to the company, the fact that new debt was incurred was due to the high costs of investing in trains and infrastructure.
Back then, Lutz said with the same remorse as today: “The railway is in the greatest financial crisis since the railway reform.” The investments were therefore to be understood as a kind of flight forward.
The flight could at least have been interrupted during the pandemic. That’s what the other formerly state-owned German transport company, Lufthansa, did. It was fully privatized 25 years ago, the shares are traded on the stock exchange and their owners are currently not very happy with the paper.
But at least the airline was able to streamline the flight schedule, send staff home and get rid of machines during the pandemic. She also needed money from the state, which she has since repaid.
Not so with Deutsche Bahn: Despite the slump caused by Corona, they stuck to their investment program at a record level, even under political pressure. New ICEs were delivered on a weekly basis. In long-distance transport alone, more than a billion euros flow into new trains, maintenance workshops and the renovation of older wagons every year.
The investments must first be financed. The debt is secondary. And the 2.5 billion that the federal government is now additionally transferring via the federal states for the nine-euro ticket are no longer significant. They are intended to compensate for the loss of income that arises despite the expected rush to the temporary low-cost railway.
How this rush fits together with the complaints from the railways about failures that are still caused by corona remains the secret of the state-owned company. The main thing is that there is money from the tax coffers for this too: it is 1.2 billion euros that the railways will get on top of it this year due to corona problems.
*The contribution “The federal government is pumping huge sums into the train because of the 9-euro ticket – it’s a billion-dollar grave” is published by WirtschaftsKurier. Contact the person responsible here.