SOURCE: 2020 ANNUAL REPORT

The spread of COVID-19 across the globe in early 2020 posed a profound disruption for the FS Italiane Group. While it had confirmed its growth in 2019 with passenger and freight traffic volumes up, in 2020 the FS Italiane Group, with its subsidiaries in Italy and abroad, faced a severe contraction in demand and supply.

Italy was the first country in Europe to institute a total lockdown between 10 March and 3 May and the restrictions on mobility in Europe and in Italy dramatically reduced the possibility to travel throughout the year.

In this scenario, the FS Italiane Group endeavoured to continue offering a number of medium/long-haul and regional routes that was consistent with demand for mobility, devoting utmost attention to the safety and health of its passengers and employees, in accordance with the limitations ordered by the government authorities. Its initiatives to ensure passengers could travel in complete safety include strengthening procedures to clean and sanitise stations, trains, buses and other areas and requiring the use of personal protective equipment (PPE) in compliance with the law. It also developed new on-board greeting procedures with the distribution of free safety kits to passengers and implemented new booking parameters to ensure staggered seating on trains.

Traffic of main European railway companies

European passenger and freight railway transport suffered severe repercussions in 2020 due to the limitations on mobility and consequent decrease in demand.

According to UIC (Union Internationale des Chemins de Fer) data, in the first half of the year, passenger traffic volumes dropped by roughly 48% in terms of passenger-km while freight volumes fell by around 15% because of the shuttering of economic activities and the slowdown in industrial production.

In the period that followed, summer 2020, demand for transport and volumes remained low for both passengers and freight. As the second wave of the pandemic struck, many governments ordered another round of restrictions on mobility, with consequent repercussions on traffic volumes.

The segment that was dealt the hardest blow was passenger transport, and specifically the commercial service segment, which suffered more than the mandatory public service segment, with a significant drop in supply in all member states (train-km down by approximately 16-17%). Demand for traffic from major European railway companies, measured as passengerkm, fell by around 57% for the Spanish RENFE and close to 40% for the German DB AG and French SNCF.

Despite suffering the European economic downturn, the railway freight transport segment suffered less than passenger transport in the wake of the protectionist policies adopted by the various member states in the wake of the coronavirus outbreak. Many borders were closed to passenger traffic but remained open to goods, ensuring the procurement of food, medicine and, in general, the goods necessary for essential activities to continue. The tonne-km drop in freight traffic for the main European railway companies was about 23% for the Spanish RENFE, 13% for the German DB AG and 16% for the French SNCF. In Eastern Europe, the Polish PKP saw the largest decrease in traffic volumes, down by just over 20%.

Transport market

The high degree of uncertainty that characterised the economic situation, the slump in industrial production across all major industrial segments (-11.4% YoY) and the mobility restrictions to contain the spread of COVID-19 resulted in a transport slowdown of previously unimaginable proportions. Overall mobility all but vanished during the public health emergency and only recovered slowly in the summer months before dropping again during the second wave of the pandemic at year end.

The drop in overall demand for mobility also reflects the rise of new ways of working in Italy, as in the rest of the world, with a shift towards independence and flexibility in terms of when and where people work and away from in-person models.

According to the most recent available data, vehicle traffic on motorways decreased by roughly 80% between March and April, and recovered only partly in the summer. Then, when the pandemic resurged in the autumn, the downturn was less dramatic. At year end, the annual drop in light vehicle traffic was 30.5%.

Collective transport, which mainly consists of local public transport (LPT), took a harder blow than individual transport, with contractions of over 90% in March and April, and only partial recoveries in the summer months. The second wave of the pandemic and the consequent mobility restrictions had less dramatic effects on LPT than the first lockdown.

The government measures restricting mobility throughout the country and across borders put a heavy toll on air traffic. Available routes and scheduled flights between a country and rest of the world dove dramatically in 2020. Overall, approximately 53 million passengers were transported by air, compared to around 193 million in 2019.

The trend in cruise ship transport was also negative. According to Assoporti statistics, just over 640 thousand passengers passed through Italian ports, including boarding, deboarding and transit, with a sharp downturn of 94.5% on 2019.

The freight segment saw more modest decreases, confirming the decisive role that logistics played for the country’s social and economic well-being during the lockdown.

Heavy vehicle traffic on roads dropped by around 40% in March and April, recovering in the months that followed and showing more resilience in the second wave of infections in autumn. Overall, the distance travelled by heavy vehicles on motorways operated by members of Aiscat (the Italian association of motorway and tunnel operators) and by former members, was down by 15.2%. Air cargo transport saw a more dramatic decline (-24.9% on the previous year), despite the key role that it played during the pandemic for the distribution of devices and medical equipment throughout the entire country.

Unlike other means of transport, despite the economic crisis triggered by the pandemic, freight transport by sea held strong, moving volumes of container goods at Italian ports equal to roughly 10.7 million TEUs (twenty-foot equivalent units), down 0.9% on the previous year.

National rail and road infrastructure

The FS Italiane group manages approximately 46,000 km of railway and road network infrastructure evenly distributed throughout Italy, connecting and integrating the country by improving quality and safety standards.

At 31 December 2020, the domestic railway infrastructure operated by Rete Ferroviaria Italiana, belonging to the FS Italiane Group, covers 16,782 km. Based on the classification used to calculate the railway network use fee, pursuant to Ministerial decree no. 43/T of 21 March 2000, the network is comprised as follows:

  • fundamental lines with high traffic density, covering 6,468 km;
  • complementary lines, which make up a dense network of regional connections and interconnections with the main lines,
  • covering a total distance of 9,364 km;
  • hub lines, which are located in major metropolitan areas for a total distance of 950 km.

Of these lines, double tracks account for 7,732 km (46% of the total), while 12,065 km (71.9%) is electrified. The total track length is 24,514.5 km, including 1,466.7 km of HS/HC network lines.

All lines are equipped with a complete, preventive maintenance system and equipped with one or more innovative trainspeed protection systems, which makes RFI’s railway infrastructure one of the safest in Europe. In particular, a train speed control system (TSCS) has been installed on 12,653 km, which monitors braking space and train performance to determine the safe distance between trains, while the high speed lines are equipped with a sophisticated European signalling system for more precise traffic management and the ERTMS/ETCS (European Rail Traffic Management System/European Train Control System), a single radio system that makes the network interoperable at speeds of up to 300km/h.

Graphics: Lenghts railway and tracks

During the year, an average of approximately 8,000 trains operated on the Italian railway network per day, for a total annual volume of around 300 million km travelled, a sharp decrease (roughly -20%) on the previous year due to the restrictions on mobility in response to the COVID-19 pandemic.

With respect to road infrastructure, through its subsidiary Anas, the FS Italiane Group operates around 29,000 km of roadways, including 1,300 km motorways. Like railway mobility, the pandemic and consequent containment measures affected road volumes and traffic in 2020. The greatest impacts recorded along Anas’s primary road network using its centralised monitoring and analysis system, were seen in the total number of vehicles, with the annual average index of road traffic down by 25% on 2019. Heavy vehicle traffic suffered less, with an estimated decrease of just over 10% compared to the 2019 index.

Passenger and cargo traffic of the FS Italiane Group

Total passenger data in the railway transport segment reflect a sharp drop in collective demand (passenger-km down 60.3% on the previous year), while the contraction in freight traffic volumes was decidedly more contained (tonne-km down 6.1% on 2019).

Passenger volumes in the long-haul service segment contracted by 64.7%, mainly due to the drop in demand for services sold on the market (-68.1%).

The universal service – which is provided according to the model defined with the government as its customer – saw a smaller reduction in volumes (-51.5%). In the market service, which includes Trenitalia’s core product, the Frecce trains, supply was down by roughly 41.6%.

Long-haul transport - Universal service (includes the Group subsidiaries’ traffic abroad)

Graphics: Long-haul transport - Universal service

Long-haul transport - Market service (includes the Group subsidiaries’ traffic abroad)

Graphics: Long-haul transport - Market service

The drop in regional transport volumes was less dramatic than in the long-haul segment. Demand met, amounting to around 10.7 billion passenger–km, in both Italy and abroad, fell by 56.5% on the previous year, with production down by 15.5%.

Short-haul transport (includes the Group subsidiaries’ traffic abroad)

Graphics: Short-haul transport

The FS Italiane group fully satisfied demand for urban local public transport in 2020, which totalled around 1.7 billion passenger–km (-41.6%), by providing approximately 173 million bus-km. The scope of the road LPT business is mostly centralised in the subsidiary Busitalia-Sita Nord, which directly and indirectly operates urban and suburban transport in various Italian regions (Veneto, Campania, Tuscany and Umbria), making it the third largest operator in the country, in addition to the LPT in the Netherlands through Qbuzz. The group’s total offer also includes the bus services operated by FSE in Puglia, the Netinera Group companies in Germany and certain bus routes operated by TrainOSE in Greece.

Road transport (includes the Group subsidiaries’ traffic abroad)

Graphic: Road transport

In the freight segment, given the complex macroeconomic situation and the slump in industrial production, total traffic volumes generated by the FS Italiane group companies in Italy and abroad, held strong, just barely reaching 21 billion tonne-km, down 6.8%, with train-km nearly in line with 2019 (-0.5%). In particular, during the lockdown, the Mercitalia companies ensured the transport and delivery of all essential goods, especially in Italy, with an upwards trend in the second half of the year.

Unlike in 2019, foreign traffic volumes were more heavily impacted by the negative performance of international trade and posted an 8.9% drop in tonne-km.

Freight Transport (includes the Group subsidiaries’ traffic abroad)

Graphic: Freight transport

In addition to railway transport and LPT, to ensure the continuity of railway services throughout the entire country, the FS Italiane group also operates sea connections between the mainland and Sicily, which are currently operated using Rete Ferroviaria Italiana ships for long-haul trains and by Bluferries’ bidirectional ships for the transport of passengers, vehicles and goods.

Transport by sea

Grahpic: Transport by sea