On Wednesday, Deutsche Bahn’s supervisory board will consider a new restructuring program for the group. With the “S3” program, the railway aims to reverse the recent bad situation by 2027. The question is what specific changes the federally owned company can make to achieve the desired results.
According to the railway, the program aims to improve infrastructure, operational conditions and economic conditions. The group has recently received a bad impression in all three areas. According to two current key figures, Deutsche Bahn AG lost 1.2 billion euros in the first half of this year after interest and income tax, and in August only 60.6% of long-distance trains arrived at their destinations on time.
2027 On-time Target: 75%+ of long-haul shipments
By 2027, things should be improving slightly. According to dpa information, the railways want to continue to follow the Strong Rail (DSS) umbrella strategy that has been in place since 2019 and roughly reach the targets set for 2024, three years later. The strategy also summarizes many of the issues that have already been addressed in recent months.
Examples include general renovation of particularly critical routes or the introduction of a new just-in-time construction system to better safeguard timetables on short-term construction sites.
According to DPA information, the target range for punctuality in long-distance transport is 75-80%, following 64% overall in 2023. The economic situation must improve, especially through labor cost reductions and productivity improvements. In the semi-annual balance sheet, the railway company has already announced that it will reduce its workforce requirements by 30,000.
The DB Long Haul and DB Cargo sectors are set to undergo a transformation, some of which has already begun. Both sectors have recently been in deficit. Infrastructure-related disruptions are expected to be reduced to 4,900 per day, while the railways expect to see 6,100 daily delays this year.
Minister of Land, Infrastructure and Transport also calls for short-term improvement
The Railway Commission has been under considerable pressure in recent months due to the group’s poor balance sheet. Federal Transport Minister Volker Wissing (FDP) recently urged federally owned companies to improve punctuality and capacity utilization in long-distance transport in the short term.
The German press is also critical of the proposed restructuring program, as it has learned from the railway industry. It lacks specific measures. After all, apart from the target year of 2027, there is no strategy that is not yet written on other PowerPoint slides. Above all, it is unclear how and where the group intends to reduce its workforce requirements by 30,000.
“We will measure our progress against fixed targets and regularly discuss it with the supervisory board and the client. One thing is clear: we need a positive change of direction for our German customers and DB,” a DB spokesman said recently about the restructuring program. In the past few months, the German railway system has shown weaknesses that are obvious to everyone.
According to a report in the “Süddeutsche Zeitung”, railway boss Richard Lutz promises more commuter connections or more sprinters in his 110-page reform program. He also wants to redesign the regional network. He also wants to shorten the turnaround times of trains and reduce the number of ICE trains as reserve trains.
