PKP Intercity loses money and passengers

19th February 2010

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Express train operator PKP Intercity lost PLN 180-200 mln last year, according to initial results for 2009. The company blamed most of its troubles on a competitor that appears to have been responsible for nearly half its loss.

The company reported that a major source of its financial problems was the loss of passengers to regional train operator Przewozy Regionalne. Its new Interregio service offers connections on the same lines between Poland's major cities serviced by PKP Intercity's trains.

PKP Intercity says passenger numbers dropped by more than half once the cheaper Interregio trains began operating last year. The decrease in customers resulted in PLN 40 mln in lost revenue.

Such cut-throat competition does not help the company, according to Andrzej Wach, president of PKP Group, the company from which both companies were spun off.

“It’s cannibalism. PKP Intercity has lost millions due to unfair competition,” he added.

Another source of PKP Intercity's losses was a PLN 85 mln debt owed to it by Przewozy Regionalne.
The poor showing could cost PKP Intercity CEO Krzysztof Celinski his job, according to Dziennik Gazeta Prawna. Infrastructure Minister Cezary Grabarczyk is considering such a move, the paper said.

The company is scheduled for privatization in the second half of 2010, but following the poor results for last year, the date may have to be pushed further back.

PKP Intercity has remained a part of the PKP Group, while Przewozy Regionalne is run independently by regional authorities. Both share ticketing operations and other aspects of the rail system maintained by other divisions of the group.