Austrian Federal Railways’ acquisition of the former Go-Ahead Deutschland business marks a significant strategic move in a regional rail market which has been characterised by instability in recent years. Toma Bačić reports.
Enter Arverio: on October 12 last year, Go-Ahead Group, the UK-based contract transport operator, agreed to sell its German business, Go-Ahead Verkehrsgesellschaft Deutschland, to Austria’s state-owned passenger operator ÖBB Personenverkehr.
Go-Ahead Deutschland had been set up in Berlin in January 2014 to exploit opportunities in Germany’s increasingly open regional passenger market. However, after nine years, Go-Ahead had come to view the business as a non-core asset, paving the way for a sale.
The British group had arguably had a chastening time in setting up a German business — one senior insider told Railway Gazette International in 2023 that its experience of working there had been ‘challenging’. The company had faced some significant headwinds, including the fraught task of contracting out maintenance, and ongoing problems with the reliability of the infrastructure in Baden-Württemberg and Bayern, where it had gained contracts to run various regional passenger routes (Table I).
In June 2022, Go-Ahead Deutschland Managing Director Fabian Amini issued a fierce rebuke of DB Netz’s management of the network, blaming track defects and severe short-notice engineering blockades for major disruption to the company’s services. However, that did not spare Go-Ahead from strong criticism of its own performance following the launch of its first services in June 2019.
A notable controversy surrounded a decision in December 2020 to outsource maintenance of some of its trainsets to TMH Germany, a subsidiary of Russian group Transmashholding. TMH Germany took on a 12-year contract to maintain a fleet of 78 Stadler and Siemens Mobility-built EMUs for use on E-Netz Allgäu and Augsburger Netze Lot 1 passenger services at a purpose-built depot at Langweid am Lech. The outsourcing then led to a dispute between the operator and Stadler, which viewed TMH as a competitor — the dispute was resolved in August 2021. Following Russia’s full-scale invasion of Ukraine, TMH withdrew from the European market and since late 2022 the Langweid am Lech depot has been run by independent maintenance contractor EuCoRail. An ÖBB spokesperson confirmed in mid-August that the operator expected to continue using EuCoRail’s services at the site for the foreseeable future.
On the path of the Gods
Austrian Federal Railways formally closed the acquisition of Go-Ahead Deutschland in February this year, taking on a business that employs 1 000 people, uses 144 trainsets and runs 20 million train-km per annum.
On July 10, ÖBB revealed the brand name for the newly bought company: Arverio Deutschland, parent to subsidiaries Arverio Baden-Württemberg and Arverio Bayern. The name is reportedly derived from Arvernus, the Gallo-Roman god of paths and roads. The first train to receive the updated brand identity was a blue Siemens Mireo EMU in Bayern.
‘The comprehensive rebranding starts immediately in all areas of the company and is expected to be fully completed by the beginning of 2025. The vehicles will retain their original design as well as the regional colours blue and yellow, even if the logo is changed’; ÖBB explained. More significantly perhaps, ÖBB has moved the headquarters of the former Go-Ahead business from Berlin to Stuttgart to be closer to its operating regions.
An investment in the future
At the time the takeover was announced, ÖBB CEO Andreas Matthä said the deal represented a continuation of the Austrian incumbent’s internationalisation strategy. ‘We are already very active internationally — as the leading provider of night trains in Europe and as the second-strongest freight railway in the EU, operating in 18 countries. We see good potential in southern Germany to grow even more strongly in passenger transport.’
‘We see the purchase of Go-Ahead Germany as an investment in the future. The goal is clear: we want to grow in Germany’, added Sabine Stock, Managing Director of the passenger business. ‘Go-Ahead Germany will maintain its previous independence and at the same time benefit from the expertise and know-how of ÖBB-Personenverkehr.’
The takeover was broadly welcomed by policymakers in Bayern and Baden-Württemberg. Christoph Schmid, Bundestag Member for the Donau-Ries Wahlkreis in northwest Bayern, commented that ‘after Go-Ahead was regularly in the media with negative reports, I now hope that improvements will be made with changes in the company structure. Regional rail transport must become reliable again so that commuters from rural areas in particular can also use public transport.’
Winfried Herrmann, who holds the Transport portfolio for the Land of Baden-Württemberg, welcomed the takeover, saying it offered ‘the opportunity to operate reliable trains in Baden-Württemberg in the long term. ÖBB has a good reputation for high-quality rail transport.
A changing landscape
There is little doubt that the purchase of Go-Ahead’s German passenger business marks a significant shift in the dynamics of the regional rail market in central Europe.
The deal strengthens ÖBB’s position as a continental player and builds on its pan-European role as the leading operator of overnight sleeping car trains. It also gives it a footing to follow in the footsteps of fellow incumbents such as Italy’s FS Group, Dutch state operator NS and France’s SNCF. However, many of these players have retreated from the contract operating market in Germany in recent years, most notably when NS wound up Abellio Deutschland.
The decision by a national operator to buy a private contractor as a means to push into the German market is not new — FS Group owns Netinera Deutschland, for example, which it acquired from DB when the latter had to divest Arriva’s German rail business in 2010 to meet antitrust regulations. FS Group has owned Netinera outright since late 2020, when it bought the 49% stake held by institutional investor Cube Infrastructure.
With both Abellio and SNCF’s Keolis subsidiary having walked away from the German regional rail market in the post-pandemic period (RG 1.22 p27), the competitive dynamics of the segment are changing. While the likes of Transdev and BeNEX remain as significant players backed by private owners, DB has been reshaping its own local rail model, increasingly using ‘white label’ subsidiaries like Regionalverkehre Start Deutschland to bid for regionally tendered contracts.
In 2022, private operators’ association Mofair warned that a trend for DB to regain regional operating contracts on a large scale would be a retrograde step for passengers. Yet there was a consensus that a model which had seen DB Regio lose almost half of train-km since the 1990s had run its course. Perhaps in light of this recent instability, ÖBB has a chance to make a significant impact.
Arverio’s contracts
At the end of 2015, Go-Ahead won the tender to run the Nahverkehrsgesellschaft Baden-Württemberg network from June 2019 to December 2032. This covered operations on two service groups: Rems-Fils (Lot 2) and Franken-Enz (Lot 3). Go-Ahead was subsequently chosen for Lot 3a, covering the Murrbahn route linking Stuttgart with Nürnberg via Schwäbisch Hall and Crailsheim. The contract signed on February 16 2018 covers operations from December 2019 to the end of 2032.
Arverio Baden-Württemberg services are all operated by Stadler Flirt trainsets. These are maintained at a depot in Essingen which was opened in 2019 at a cost of €19m. The site is managed by the Arverio Facility business unit and Stadler is responsible for fleet maintenance under a contract lasting 13½ years.
In Bayern, meanwhile, Go-Ahead won the operating contract for Elektronetz Allgäu services in August 2018, which runs from December 2021 to December 2033. On December 7 2018, the company was picked to deliver Lot 1 of the Augsburger Netze service group. A central office to run the Bayern operations was established in Augsburg, and construction of the maintenance hub commenced at a site between Gablingen and Langweid am Lech stations to the north of the city. Transdev Vertrieb was retained to operate the ticket machines on behalf of the operator.
Rolling stock
The Arverio Deutschland fleet now totals 144 trainsets. An initial order for 45 Stadler Flirt3 EMUs placed in May 2016 covered 11 three-car, nine four-car, 15 five-car and 10 six-car variants. In December of that year, a follow-on order was placed for more Flirts, comprising two three-car, four five-car and four six-car sets.
When it won the contract to run Murrbahn services, Go-Ahead went back to Stadler again, placing an order for 11 three-car Flirt3XL trainsets on September 6 2017. These are adapted for 760 mm high platforms and have longer carbodies than the standard Flirt.
For the Augsburger Netze operations, 12 five-car Siemens Desiro HC and 44 three-car Siemens Mireo trainsets were ordered under lease agreements lasting 27 years.
