ÖBB justifies ‘dumping prices’

Federal Railways (ÖBB) has defended the introduction of crash prices.

A spokeswoman for the company said today (Fri) criticism of the latest move was “incomprehensible” since the customers would eventually benefit from it. ÖBB caused a stir by presenting a programme featuring 25,000 tickets for 15 Euros each for its western railway link connecting Vienna and Bregenz. ÖBB clients owning a VorteilsCard can take advantage of the offer. The VorteilsCard is a bonus card costing 99 Euros a year. It guarantees a general 50 per cent price reduction and other advantages.

ÖBB’s latest ticket price reduction angered private rival Westbahn since ÖBB CEO Christian Kern vowed to shun a price war. Westbahn officials also complained that ÖBB was solely able to offer such low prices thanks to generous public subsidies. The partly state-owned firm receives financial support from the Republic of Austria for all of its domestic services except the popular Vienna – Salzburg route which is part of the connection between the federal capital and Bregenz in Vorarlberg.

Westbahn reacted to the ÖBB offer by putting 7,500 tickets for 7.50 Euros each on the market. The tickets are valid for its Vienna – Salzburg service set to start on 11 December. The private firm founded by Strabag SE chief Hans Peter Haselsteiner will start operating on 11 December. Westbahn’s trains will feature compartments for smokers. Bakery chain Ströck will be in charge of on-board catering services.

Westbahn spokesman Manfred Mader told the Salzburger Nachrichten today: “We promised to offer half the price ÖBB is charging. We do not break our promises.” Regular Westbahn tickets will cost 23.80 Euros. This is as much as ÖBB charges VorteilsCard holders for second-class journeys between Vienna and Salzburg. People who do not own the bonus card are asked for twice the sum by the state-owned company which had 210 million passengers overall last year.

Mader made clear that Westbahn was considering taking the state to court over ÖBB’s “dumping prices” since its subsidies allegedly enabled the company to charge around a third less for similar services than state-owned counterparts in Switzerland and Germany. Westbahn feels ready for competing with ÖBB thanks to its partnership with Societe nationale des chemins de fer francais (SNCF). The French railroad enterprise holds a 26 per cent share in the private Austrian company managed by ex-ÖBB decision-maker Stefan Wehinger.

Westbahn also wants to tackle ÖBB’s dominance on the road. The firm said in September its coach service was set to start in December, simultaneously to its Vienna – Salzburg passenger rail service. Wehinger explained that his company planned to operate buses on five routes including Vienna – Klagenfurt and Graz – Linz. ÖBB’s Postbus affiliate focuses on short-distance connections. The coach company counted 250 million customers in 2010.