Spain accuses Ouigo, the low-cost subsidiary of SNCF, of “dumping”

Spanish Transport Minister Óscar Puente severely criticized SNCF's low-cost subsidiary Ouigo on Monday, accusing it of selling at a loss to increase its market share in passenger transport at the expense of the Spanish national company Renfe. In an interview with Onda Cero radio, Mr. Puente, a socialist, criticized Ouigo for selling tickets “far below” their cost for high-speed trains, calling it “deeply unfair” practices. The left-wing government of Pedro Sánchez, he said, is studying the possibility of denouncing Ouigo before the National Markets and Competition Commission (CNMC).

While indicating that the liberalization of the rail market had brought "positive things", in particular by leading to a drop in prices, he considered that it had "reduced them to a level which was not sustainable" for the companies which competing for the market, namely Renfe (which also has a low-cost subsidiary, Avlo), Ouigo and Iryo, a subsidiary of the Italian public company Trenitalia. “Competition must be fair and must allow the three companies to make profits or, at the very least, not to suffer losses,” continued the minister.

Contacted on Monday by AFP, SNCF did not wish to comment directly on Mr. Puente's comments, referring to statements made by one of its senior managers to the Spanish press on March 20. “The Ouigo model in Spain is based on the volume made possible thanks to its duplex trains with 509 seats (1018 in multiple units), thus allowing economies of scale and maintaining low prices,” declared Alain Krakovitch, president of Ouigo España and TGV-Intercités director of SNCF Voyageurs, recalled the SNCF. “More than 50% of Ouigo customers are customers who have never taken the train before, and half are customers who have chosen the modal shift. They opted for Ouigo rather than the plane or the car,” he added, indicates the SNCF.

In an article published Monday under the title "Open war between the Ministry of Transport and Ouigo because of the continued drop in prices", the Catalan daily La Vanguardia underlines, citing a report from the CNMV (National Securities Market Commission) on high-speed trains, that this three-way fight has caused prices to fall by 40% compared to when Renfe still had a monopoly, three years ago. According to the Barcelona daily (north-east), the Spanish government considers that the pricing policy practiced by Ouigo would not be possible without the agreement of the French authorities, since SNCF is a public company. Ouigo has been present in Spain since May 2022.