Rail and Fly – it’s time to prepare the pilot – CPK will stimulate the cooperation of railways with LOT

It’s time for Rail and Fly in Poland? How can you eliminate the risks that Intercity was afraid of? CPK pushes partners towards each other?

The very popular Rail and Fly service has not been able to successfully breakthrough on the Polish market for a long time. There are several reasons for this. However, in the context of Central Airport and the railway network expansion plan, such a project will be indispensable.

Rail & Fly how it works abroad – even the Czechs already have it

The Rail and Fly product itself has been operating on the market for many years. Traditionally the most extensive version is offered by German railways. In recent years, the service has also been launched by other railway companies, such as Renfe in Spain or the private Italo railway in Italy, and recently also Ceske Drahy.

In simple terms, the product allows you to book the entire journey (train plus plane) on 1 ticket / booking. The availability of the rail network significantly increases the geographical coverage of the service. It also allows airlines that do not have an air partner in the country of the service to obtain power for their flights by rail.

The advantage of the product is its global reach, as the service is available in GDS (global distribution systems). All Iata agents around the world can book it easily.

Attempts in 2013-15 and a project to the basket

In 2013-2015, PKP carried out quite advanced activities in this field. It seemed that cooperation with LOT would be possible. Unfortunately, the obstacle was, among others Pendolino’s commercial success, which took Lots away from a large number of corporate clients. On both sides, there was no idea how to reconcile short-term business calculation with a long-term vision of cooperation in many fields, including a common loyalty program.

The poor systemic preparation on the part of Intercity. The final resignation from the tender for a new modern reservation system did not help either. If we add to this the disproportionate financial risk related to the lack of punctuality on the railways, skepticism regarding this project is not surprising.

LOT did Bus & Fly to play on the nose at regional airports – but it itself fell

LOT of cities to cooperate with PKP decided to launch its own FLY & BUS project. The aim was to play on the nose of regional airports. Buses from Łódź and Lublin, among others, caused the anger of the environment associated with local airports. Although LOT technically did everything right, the project was doomed to failure from the very beginning.

It lacked the basic advantage that it gives to the railway air partner. Virtually non-investment access to additional seats/passengers. Trains run anyway, and you can sell a place to connect to the plane. LOT buses were launched strictly in terms of air connections, they did not even have the possibility to sell seats for the course only to the airport. In this way, passengers using competing lines were cut off, as well as those who wanted to come, for example, to the Warsaw „Mordor” (where you can basically go from the airport on foot).

What is LOT and what Intercity is most afraid of

Still the main problem on the part of LOT is the lack of an idea to reconcile competing with Pendolino on high-volume and profitable routes to Gdańsk, Wrocław and Kraków with cooperation with a railway carrier. As you know, the idea and location of the CPK will force such cooperation. Recent decisions to suspend flights to Katowice and Poznań show which destinations will be the first victims of such a marriage. Anyway, LOT has already had ideas of resigning from flying to these cities for a long time. Politically, such a decision was impossible to swallow. CPK will help by giving a hard justification.

There are more problems on the part of PKP. We still have the old booking system and generally poor system preparation for cooperation with external providers. The example of the lack of a universal API demanded by agents and self-booking tools is perhaps the most glaring.

In addition to systemic and mental problems. The railroad also has important remarks on the proportion of risk for such a project. Especially in the context of sharing the proceeds from joint tickets, which will always be significantly disproportionate for railways. There is also a significant risk of compensation. Especially in the case of long-haul flights, which are not offered every day. Overbooking air passengers as a result of delayed trains will be very painful financially. Naturally, you can try to mitigate this risk through appropriate insurance.

How to reduce risks and check the market within the project pilot

However, the above-mentioned risks can be significantly reduced. At least as part of a FLY & Rail pilot. Two simple ways to reduce this problem are this.

First, reduce the availability of the service to travel only to Poland in the first phase. This way, even in the event of delays, managing an injured passenger will be simpler and much less costly. We eliminate the possibility of being late for the plane.

The second idea is to launch the pilot as part of a country-only trip. In the times before the pandemic, the volume of connecting journeys inside Poland grew significantly. One can imagine an attempt to offer affordable Fly & Rail tickets from Białystok / Lublin to Szczecin or Gdańsk or from Bydgoszcz / Olsztyn to Rzeszów or Katowice. The advantage of such a ticket could also be the stop-over option in Warsaw. Additional time for business meetings in the capital city could be very desirable for business travelers.

Of course, we will not build large volumes on this type of travel. But it could be possible to gain the necessary commercial and system experience before further extending the service.

Undoubtedly, time and the upcoming implementation of Central Airport project will drive LOT and Intercity together. A common loyalty program, programs for companies and FLY & Rail should be the pillars of this rapprochement. It is not worth wasting time, especially since the time of the pandemic is a good time for conceptual preparations.

Łódź will sell (close) the airport – a bad omen for regional airports