S&P Global Ratings believes the coronavirus pandemic will have a more severe impact on European rail travel than it first thought.
It now says traffic in 2020 will be down 45%-60% on 2019 levels, updating an earlier forecast of a 35% decline.
In many countries, it will take until 2023 "at the earliest" for activity to return to 2019 levels, the agency said yesterday.
Travel restrictions, remote working, and the need for social distancing on trains are all suppressing demand.
Over the lockdown months between March and May 2020, passenger traffic declined by more than 90% in many European countries, including Italy, France, and the UK.
Since travel restrictions were eased, recovery has been partial.
International rail travel has been hit hardest and volumes remain low, while domestic rail travel volumes remain subdued and volatile.
"Although we assume that the recovery will be gradual, it might not occur in a linear fashion, but could ebb and flow," said S&P Global Ratings credit analyst Tania Tsoneva in a press notice.
"In the near term, we forecast that passenger numbers will remain as subdued in the upcoming winter months as in August and September.Â
"Passenger numbers could then remain below pre-pandemic levels in 2021 and 2022 considering capacity shortages due to social distancing, potential changes in commuter behaviour, a slow return of customer confidence in public transport, and the uncertain macroeconomic backdrop and rising unemployment rates."
She said rail travel will recover faster in countries with populations that are conscious of climate change, as will regional and freight services.Â
Weaker passenger demand weighs on European rail operators’ credit metrics due to their high operating leverage.Â
The rating impact will depend heavily on the extent of governments’ support measures, the agency said.
Photograph: French commuter trains at BesanÃ§on-TGV railway station in the department of Doubs (Florian Pépellin/CC BY-SA 3.0)