Competition in Spain’s high-speed rail sector is heating up and two new players, Iryo and Ouigo, are making a significant impact on the country’s busiest rail connection: the Madrid – Barcelona route.
These two companies have rapidly gained a large market share and now account for 45% of passengers on this route, posing a considerable challenge to the public operators, Renfe and Avlo.
Iryo: growth in record time
Iryo, a company owned by Trenitalia, Globalvia and Air Nostrum, began operating on the Madrid-Barcelona connection in November last year.
In the second quarter of this year, it experienced explosive growth, carrying 866,700 passengers, representing 24% of the total number of passengers on this route. This rapid success is all the more impressive given that Iryo has only been operating for a short period of time.
Ouigo: the French company challenging the Spanish market
The French company Ouigo made its debut on the rail connection between Madrid and Barcelona in May 2021. During the second quarter of this year, it transported 749,990 passengers, an increase of 23% over the previous year. Although its market share is 21%, Ouigo is rapidly gaining ground.
Expansion of the high-speed market
It is important to note that Iryo and Ouigo are not stealing passengers from Renfe and Avlo, but are contributing to the growth of the rail market.
In total, Renfe-AVE and Avlo accounted for 55% of passengers, or 1.99 million people, a minimal decrease of 2.6% compared to the same quarter of the previous year.
In addition, train occupancy on this route has been exceptionally high, exceeding 90% for all operators, with the exception of Iryo, which had an occupancy rate of 82.99%. Renfe and Avlo trains reached an impressive 99.2% occupancy rate, while Ouigo trains reached 99.9%.
Competitive pressure and rising prices
Despite the growth in passenger numbers, operators are beginning to feel the pressure of competition. Ouigo has announced the withdrawal of one of its five daily trains between Madrid and Barcelona due to lack of profitability.
In addition, ticket prices have experienced significant increases during the second quarter. Fares now range from €40 to €47 each way for Ouigo, Iryo and Avlo, compared to €66 for Renfe’s AVE.
The National Markets and Competition Commission (CNMC) highlights that Spanish high-speed rail reached a record 8.32 million passengers in the second quarter, an increase of 33% compared to the previous year.
Among the busiest routes are the connections between Madrid and Seville, Madrid and Alicante, as well as Madrid and Valencia.
