Friday, April 09, 2010

Locomore to challenge Deutsche Bahn on home turf

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Berlin-based Locomore Rail GmbH & Co. KG plans to launch long-distance passenger rail service between Hamburg and Cologne beginning in April 2011, offering direct competition to domestic stalwart Deutsche Bahn (DB).

Locomore, a company backed by Pittsburgh-based Railroad Development Corp. and Birmingham, England-based investment advisor Michael Schabas, plans to offer service three times a day between the two cities, offering roughly the same travel time of just over four hours but at a competitive price, according to company chief executive Derek Ladewig.

The company had considered launching service on two other routes, but has postponed any such plans because of difficulties in obtaining financing for rolling stock, Ladewig said.

Locomore’s long-distance challenge to DB inside Germany itself marks the first such challenge to DB, but DB itself is no stranger to a competitive passenger marketplace.  It already faces competition on several local and regional lines inside Germany, while DB has aggressively sought to expand operations throughout the European Union. Deutsche Bahn AG already generates 23% of its revenue from sources outside Germany.

As one example, DB has a presence in Britain with itspurchase of Laing Rail, owner of the Choltern Railway franchise, in 2008. Last month DB confirmed it had approached British rail and bus operator Arriva PLC on a possible acquisition.