24 April 2010

The Germans Are Coming (Again)

Deutsche Bahn - German National Railways - was at one time the world's most loss making travel business. Today it is the model of efficiency. The services are pretty good. I recently road the rails with them and was even more impressed than before.

Now it seems they are setting their sights across the waters to the UK Based pan European Bus and Train operator Arriva.

This would mark a significant expansion outside Germany for DB.

DB will be subject to some strict scrutiny not just by the regulators but by other European Short Haul transport operators - I am thinking Ryanair for one. How much of the State subsidies are used to fund these forms of acquisition is a touchy subject in Europe. The quasi government owned or subsidized entities have advantages. Not least of which is the underwriting of the risk in their core businesses. The BBC and its commercial arm BBC Worldwide Ltd (formed 15 years ago from the BBC Enterprises unit) competes with many commercial operators. And let's not forget the Boeing vs. Airbus battle.

So will DB be successful in its bid for Arriva? Probably. This is a business of enormous scale and with significant labour issues. Arriva alone has 34,000 employees.

Watchout... The Germans are coming!


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