Renfe is preparing a radical modification of its commercial policy. Its main brand for high-speed services, AVE, will cease to operate as such and will focus on ‘point-to-point’ relationships with the greatest demand and which are also the most profitable. For example, a Madrid-Barcelona train will only stop in Zaragoza and will stop in Guadalajara or Lleida. This change is completed with the reconversion of its Avlo brand, originally designed to compete at low cost, but which will now be the one that reaches all these intermediate stops, replacing the AVE in smaller towns.
But none of this will happen until Renfe has the 30 Avril trains of the 106 series that Talgo has delivered months late, and that the company is now beginning to test on the tracks. The most optimistic proposed the commissioning of these trains for the summer, but internal forecasts move the commissioning to the end of 2023 or the beginning of 2024, so that the commercial policy is, for the moment, a “repositioning with a view to the future”, as defended by the public company. It remains to be seen how these new units are redistributed, several of them were designed for concepts because they would no longer have a place in the new strategy.
Avlo twist casts doubt on low cost
The fundamental doubt affects the ‘low cost’ segment, where the main competition is the French Ouigo. If Renfe repositions the Avlo brand to the usual commercial services, it is to be expected that it will give up the battle for the low-cost traveler. To compete with these, Renfe reformed several trains to increase their capacity by 20% and compensate for the drop in income from offering cheaper tickets. This same week they beat the French by announcing the arrival of Avlo in Alicante, and they are already competing for this type of travelers on the routes that connect Madrid with Barcelona and Valencia.
In addition, of the new order that is about to arrive, ten units were designed to offer ‘low cost’ services under the Avlo brand in the Madrid-Barcelona corridor. With these, the trains that are being used today would be released, which would be taken to new destinations such as Seville or Malaga. The two cities for the purple trains have also been advanced by Renfe coinciding with the arrival of the competition in Andalusia, although they will do so under minimums: they will only have one outbound and one back to Madrid that will be there to test the new strategy. Ouigo will not be a competition until 2025 due to technical incompatibilities.
Although the internal differences are not substantial (they do not have preferential class or a silent carriage), the arrival of Avlo at the intermediate stops at the expense of the AVE would mean, in short, a slight degradation of the service that Renfe offers in these cities, since The cafeteria or trips with pets disappear at the expense of offering a model closer to that of low-cost airlines, with limits on luggage. In any case, and while waiting for Renfe to detail its planes, it is expected that both services will continue to coexist in most stations, without reducing the total number of frequencies offered in these towns that will no longer have AVE.
With this new proposal, the operator chaired by the newly appointed Raül Blanco seeks to maintain a good part of its market share, affected by the entry of competition in high speed, and which is causing Ouigo and Iryo to progressively remove passengers from the operator public, apart from making the plane or the road. The French already move 7% of the passengers of the Spanish high-speed network; There are still no official data for the Italian-Spanish.
Faster trains for those who pay the most
In this turn, Renfe also seeks to attract the ‘premium’ segment after seeing its reign threatened by Iryo. Although the last operator to arrive started its first journeys with low occupancy levels, it acknowledges that it is filling its trains as the months go by without actually providing confirming data. Its use includes a specific commercial offer for the business segment, associated with its intentions to turn the trip into an “experience”, as revealed by the company’s marketing director, Óscar Santamaría, at the HIP 2023 event held yesterday in Madrid. To do this, it has partnered with the Only You hotel chain and has its own gastronomic brand, Haizea.
But the state operator has an organization greased after many years on the roads, and is committed to defending its territory using experience. It will do so by promoting its greater permeability throughout the Spanish territory —it is the only operator that reaches all the provinces—, its return policy, better than that of its competitors, and even selling itself as the only operator capable of lowering the 2 hours and 30 minutes between Madrid and Barcelona. As of today, it already has a train every day that it does so (it takes 2:29 hours), a frequency that will foreseeably increase when the new commercial policy comes into force.
In case the recomposition puzzle seemed complex, to the equation we must add the medium-distance services subsidized by the State that the public operates under the Avant brand. To increase occupancy on certain routes and times, some services
Modification of these services depends on the Council of Ministers, as they are regulated as Public Service Obligations, the legal figure that allows covering a possible operating deficit. Among these connections are the one that connects Valencia with Requena-Utiel, Calatayud-Zaragoza, Madrid-Cuenca-Albacete or Barcelona-Girona-Figueres, services that will stop being provided with AVE trains to do so with Avlo, the only ones that will stop at these stations with much less passenger traffic.