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Delay chaos, but billions in profit - the crazy year at Deutsche Bahn

Contrary to expectations from many quarters, Deutsche Bahn is doing well in the current financial year.

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Delay chaos, but billions in profit - the crazy year at Deutsche Bahn

Contrary to expectations from many quarters, Deutsche Bahn is doing well in the current financial year. "We will make a profit of around one billion euros this year," said Deutsche Bahn CEO Richard Lutz at the Hamburg business journalists' club. In the past two years, the railway group had made a loss, 1.6 billion euros last year and three billion euros the year before as a minus in the pre-tax result.

One reason for this is the well-filled passenger trains. In September, Deutsche Bahn achieved an all-time record in long-distance traffic with sales of around 500 million euros, according to the Deutsche Bahn boss. However, the punctuality of the trains is still far behind the promises made by the railway management.

According to the information, this value is currently a good 60 percent and is only improving slowly. The reason for this, according to Deutsche Bahn, is too many construction sites and weaknesses in digitization on the track sections.

Other reasons for the surprising turnaround in earnings at Deutsche Bahn are the financial peculiarities of this year. Like all other companies, the railway group is suffering from rapidly increasing energy costs and high inflation. The railway is the largest electricity consumer in the country, railway boss Lutz mentioned increases in electricity prices of several hundred percent.

However, this jump in prices will not fully affect the rail company this year due to long-term secured prices for electricity supplies. "Next year it will be completely different," said manager Lutz. Then price increases at all levels would put a massive strain on the railways.

The year 2022 is also special when it comes to personnel costs: no collective agreements will expire this year, the expenses for personnel will only increase significantly compared to the previous year. In the coming year, however, negotiations with the railway and transport union and from October with the union of German locomotive drivers are on the agenda from February. Wage increases, such as those recently in the low single-digit percentage range, will then certainly hardly come out as an agreement.

Above all, however, the long-distance trains and freight trains, which are again being used to capacity, contribute to the economic success of the railway group. In the time of the corona pandemic, the passenger trains were sometimes only used to ten percent. "Demand has come back much faster than we expected," said Lutz.

In long-distance traffic, capacity utilization is already back to the level it was before the outbreak of the corona pandemic. According to the information, freight traffic is also growing significantly. It is possible that the railway company will achieve sales of more than 50 billion euros this year.

An economically important topic at Deutsche Bahn is currently the upcoming sale of the Schenker subsidiary. The logistics company from Essen is the world's third largest transport company after the Post subsidiary DHL and Kuehne Nagel.

"Nothing has been decided on this yet," said Bahn boss Lutz when asked about a possible buyer. Competitors such as DSV from Denmark are just as likely as international financial investors. However, the decision on the future of Schenker, which has 72,000 employees at 2,100 locations, is expected to be made this year, possibly at a supervisory board meeting in mid-November.

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