Global Economics

All Aboard Europe's Newest Superfast Train


France is launching an express with Lacroix interiors that will link Paris with western Germany at 199 mph. More high-speed trains are on the way

Imagine a train that would get you from New York to Boston in an hour, or from San Francisco to Los Angeles in less than 2 hours. Science fiction? Not in Europe.

Superfast trains have been zipping passengers around the Old World for more than 25 years—and now Europe’s high-speed rail network is about to get even bigger, faster, and more luxurious.

On June 10, France’s national railroad inaugurates its latest TGV, or train à grande vitesse line, linking Paris with eastern France and neighboring parts of Germany, Switzerland, and Luxembourg. Trains on the new line, outfitted with swanky interiors by fashion designer Christian Lacroix, will travel 199 miles an hour, faster than any other European train. At that speed, the 190 miles between New York and Boston—covered now by Amtrak’s Acela Express in a leisurely 3 hours and 30 minutes—would pass so quickly that you’d barely have time to read the newspaper and have a coffee.

That’s just the beginning. The TGV-powered Eurostar, which links London with the Continent, is set for a major speedup in November, when track improvements will shave 20 minutes off the travel time between London and Paris, down to only 2 hours and 15 minutes.

Perfect Venue for Fast Trains

By the end of the year, the Dutch will open a new high-speed line that will cut travel time between Brussels and Amsterdam in half, to about 90 minutes. Spain is upgrading a high-speed line between Barcelona and Madrid, a journey that only a few years ago took nearly seven hours but by the end of 2008 will take only 2 hours and 30 minutes (see BusinessWeek.com, 6/13/06, "Europe on a Fast Track").

All told, Europe’s roughly 3,000-mile high-speed rail network is set to grow another 1,700 miles over the next three years. Eventually, European Union officials want to create an unbroken, 1,500-mile high speed line connecting Paris with Bratislava, Slovakia, on the European Union's eastern rim.

Europe, of course, is the perfect venue for fast trains. It has a population of nearly 500 million in an area less than half the size of the U.S., a rapidly integrating economy, and some of the highest gasoline prices in the world. Besides curbing congestion and pollution, Europe’s high-speed trains are remarkably safe. In more than 25 years, there have been only a handful of serious accidents.

Beneficial for Property Values

High-speed rail yields economic benefits, too. Property values in some areas of southern France soared when France in 2001 completed a TGV line linking Paris with the Mediterranean port of Marseille. The arrival of the TGV Est is expected to produce a boom in tourism for Alsace and Lorraine in eastern France, a region that until now has been relatively isolated and economically depressed.

The new train could even give a boost to European political unity, by improving access to Strasbourg, a city in Alsace that’s the seat of the European Parliament. Travel time from Paris to Strasbourg will drop from 4 hours to only 2 hours and 20 minutes.

All that helps to explain why—in contrast to the U.S.—European governments are happy to subsidize rail travel. The more than $6 billion price tag for the new TGV Est was paid mainly by France’s state-owned national railroad and by French taxpayers, with help from the EU. The locomotives and cars are built by French industrial giant Alstom and by German engineering group Siemens (SI).

Family-Friendly Fare

Of course, the trains have competition. European discount airlines have grown rapidly, even as the high-speed rail network has expanded. Ryanair (RYAAY) and EasyJet, the two biggest European discounters, together carry more than 80 million passengers a year. But that’s still less than one-third of the nearly 250 million passengers who traveled on European high-speed trains last year.

And while bare-bones service is the essence of discount airlines’ business model, Europe’s new high-speed trains are moving upscale. The new TGV Est, for example, will boast such amenities as individual power outlets at each seat and "family areas" where seats can be tipped together to give children room to play. Three new train stations were built along the route, and 20 existing stations were given facelifts, with Wi-Fi service installed in most waiting areas.

Fares will be surprisingly low. A ticket from Paris to Strasbourg, taking 2 hours and 20 minutes, will cost as little as $60 in first class, and $34 in second. Paris to Frankfurt, 3 hours and 50 minutes, will cost as little as $86 in first class and $52 in second.

And to celebrate the TGV Est’s launch, more than 5,000 tickets a day will be offered for only $20, to destinations anywhere on the line in France and Switzerland, and for only $25 to destinations in Germany. Even if you can’t take advantage of that offer, climb aboard now for a closer look at the TGV Est.

Matlack is BusinessWeek's Paris bureau chief.

Best LBO Ever
LIMITED-TIME OFFER SUBSCRIBE NOW
 
blog comments powered by Disqus