French rail company may need state coronavirus bailout
Strict lockdown measures have seen long-distance train travel in France fall by nearly 90%. At the moment, skeleton services are running for essential workers – causing huge financial losses.
State-owned rail company SNCF has reported losses of around €2 billion, and, according to CEO Jean-Pierre Farandou, the firm will need government aid to prevent job losses.
It’s expected that commuter trains will resume as normal by next month. However, the TGV high-speed service will be on a light service due to restrictions on travel.
In an interview, he warned that COVID-19 could have a big impact on the company’s profits.
He said: “The virus, for the moment, means we’re missing about €2 billion in revenue. It wouldn’t be abnormal to think of an aid plan for the SNCF.”
“When the time comes we will discuss it with our main shareholder, which is the state. We will have to talk about it because the deficits are widening and the debt will increase.”
He added that “if the recovery is slow and we are producing fewer trains than in the past, it will not be abnormal or illogical to adjust the level of employment to the volume of activity.”
As cutting jobs would be a disaster for workers and the economy, there could be a bailout, similar to those of airlines.
According to the media, there has already been a request for €3bn in funding. This might be paid out of France’s part of the EU aid package – which is worth €7bn.
The Community of European Railways says that rail travel is better suited for social distancing than air travel, so – as the future of air travel is so unclear – it would be worth adapting these services rather than trying to get flights up and running.
Airlines say social distancing wouldn’t be viable on flights. But SNCF’s Jean-Pierre Farandou said it’s possible on trains and work is already underway to adapt carriages and accommodate for this.