Europe Rail Infrastructure Market Size, Share & COVID-19 Impact Analysis, By Service Provider (Rail Fleet Operator (Rapid Transit Railway, Passenger Railway, and Freight Railway) and Infrastructure Manager (Rail Network and Signaling, New Track Investment, and Maintenance Investment), and Regional Forecasts, 2022-2029

Europe rail infrastructure market size was valued at USD 129.49 billion in 2021 and is projected to grow from USD 135.81 billion in 2022 to USD 185.04 billion by 2029, exhibiting a CAGR of 4.52% during the forecast period. The global COVID-19 pandemic has been unprecedented and staggering, with rail infrastructure experiencing lower-than-anticipated demand across Europe compared to pre-pandemic levels. Based on our analysis, the Europe rail infrastructure market exhibited a decline of -21.36% in 2020 as compared to 2019.

The Europe rail infrastructure market share is owned and operated by many public and private players across the region. Railway infrastructure managers are provisionally responsible for the maintenance of the tracks, the signaling system, and the installation of new tracks to provide safe and punctual rail transport services. Railway operators are those who own the railway fleet to provide regional or cross-border transport services for passengers and freight. Passenger transport services also include express transport, which consists of transporting passengers to metro, metro, and tram.

The growing focus on reducing carbon emissions has led to significant investments by governments and private actors to incorporate new technologies into railways to provide safe and sustainable modes of transport. Electrification of railway infrastructure is one of the most important catalysts that will drive the growth of the rail transport industry. The focus on safe modes of transport has encouraged increased investment in upgrading existing signaling systems, especially in European countries.

The European Rail Traffic Management System (ERTMS) is adopted by most European countries to provide an advanced and unified rail signaling system across Europe. A rail fleet based on hydrogen fuel cells is also being developed, and many giant companies have successfully tested pilot projects of hydrogen or hybrid mode rail fleets.

COVID-19 IMPACT

Decreasing Demand for Rail Transport Hampered Market Proliferation Amid the Pandemic 

Since the start of the COVID-19 outbreak in December 2019, it has spread to more than 140 countries around the world. The global impact of the pandemic had already been felt and imposed a substantial effect on the Europe rail infrastructure market growth. The COVID-19 pandemic had a significant impact on the European economy, with some businesses temporarily closing and massive supply chain disruptions occurring across the region.

Due to COVID-19 restrictions, the rail fleet operator market saw a 48.6% decline in revenue in the year 2020-21. The decline in demand for rail transport changed the dynamics of the sector. The lockdown situation during COVID-19 significantly affected the industrial sector, leading to a slowdown in production in several industrial units. As a result, many ongoing rail projects have been significantly impacted in terms of budget and schedule.

LATEST TRENDS

Increased Investments in Technologically Advanced Railway Signaling System to Drive Market Growth

A greater emphasis on safe and secure modes of transport has led to more investment in upgrading the railway signaling system across the region. ERTMS also includes the European Train Control System (ETCS) which allows automatic train protection. Austria, Italy, and the Netherlands also use advanced technologies such as Communication-based Train Control (CBTC), Obstacle Sensing System (ODS), GNSS-based tracking system, and many others. Most railway undertakings have seen fewer accidents and improved rail punctuality. Therefore, an advanced signaling system will continue to promote the growth of the European railway market.

DRIVING FACTORS

Increasing Demand for Transportation Due to Growing Population Aids the Market Growth

Europe rail infrastructure is the foundation that supports the transportation system which connects ports, train stations, and airports. Rail systems drive both social and economic development by connecting people for the purpose of education, jobs, and health services on a daily basis. Increasing transport demand as a result of globalization, rapid aging of transport infrastructure, corporate and government spending to expand rail infrastructure, and growing desire for faster transport all contribute to the growth of the market.

Similar to intelligent transport systems that combine information and communication technology, intelligent transport systems are chosen for their highly efficient transport services, including traffic management. These technologies also contribute to improving the operational efficiency of transportation networks and the safety of railways, which is expected to boost the growth of the railway infrastructure market during the forecast period.

Increasing Investments in the Rail Infrastructure Market to Elevate Market Augmentation

Natural disasters, such as landslides and earthquakes, also led to infrastructure destruction in some places. To solve these problems and meet current demand and requirements, governments of various countries and several investors are investing heavily in infrastructure projects. The frequently changing climate raises serious concerns, creates a need to rethink rail systems, and drives investments in research and development.

This also encouraged new technological improvements such as subways, maglev trains, light rail, monorails, and hyperloops. Global concerns such as global warming, declining resources, and rising fuel prices have led to the emergence of eco-friendly modes of transportation in various countries. Recently, Spain has announced to spend more than USD 26 billion for rail infrastructure development across Spain.

RESTRAINING FACTORS

Slow Pace Development in Rail Infrastructure is Restricting the Market Growth

European countries invested significantly more in roads than in rail infrastructure, leaving it fragmented, underused, and largely useless. Over the past 20 years, 6,000 kilometers of railways have been decommissioned. According to the Italian research center (Osservatorio Balcani e Caucaso), there are only 125 long-haul flights between EU countries every day. Despite the promises, the development of the nuclear railway network in Europe is seriously delayed, and the unified signaling system has been installed and 90% of it is still in progress, which is hindering the market growth.

SEGMENTATION

By Service Provider Analysis

Railway Fleet Operator Segment Held Major Share Owing to Growing Demand for Fast and Passenger Transport in Europe 

By service provider, the market is divided into railway fleet operator and infrastructure manager. The railway fleet operator segment is dominating the market during the forecast period due to increase in rapid and passenger rail transport. Rapid rail transport offers an affordable and hassle-free mode of transport, especially within cities.

The infrastructure manager segment is expected to experience the highest growth due to significant investments in the development of new railway lines and signaling systems.

• In February 2022, Arriva Group’s Chiltern train operating company launched the first ever 100mph Hybrid Flex train on the U.K. national rail network into passenger service. The diesel train is fitted with a battery pack to reduce emissions and noise when approaching or leaving the station. This innovation is an outcome of a four-year partnership between Rolls-Royce, Chiltern Railways, and Porterbrook. The train’s powerful battery can reduce fuel consumption by 25% in use.

By Railway Fleet Operator Analysis

Growing Investment in Rapid Transit Segment to Drive Segment Growth

By railway fleet operator, the market is divided into rapid transit railway, passenger railway, and freight railway. The rapid transit railway segment is the largest segment due to increased adoption of rail transport and rail operators in the region. The rapid transit railway segment is expected to grow at the highest CAGR during the forecast period followed by passenger transport. The growth of this segment is attributed to increased investment by the government and several major players in the region for the rail infrastructure development and network expansion.

By Infrastructure Manager Analysis

Expansion of New Rail Routes is Driving the Growth of New Track Investment Segment 

By infrastructure manager, the market is segmented into maintenance investment, new track investment, and railway network and signaling. It is estimated that the new track investment segment has the largest market share, and will see higher growth as a result of increasing rail network and focus toward safe rail transport. It is estimated that the railway network and signaling segment will also record fastest growth following the growing investment in upgrading the railway signaling system.

• In February 2022, Harsco Rail extended its contract of railway track maintenance with Infranord AB for the next year. Infranord‘s Stoneblower is a revolutionary machine developed explicitly for restoring and aligning tracks vertical and lateral alignment.

REGIONAL INSIGHTS

Geographically, the Europe market is studied across Northern Europe, Southern Europe, Eastern Europe, and Western Europe. Western Europe led the market in 2021 and was valued at USD 59.01 billion in 2021. This growth is due to the U.K., France, and Germany governments’ heavy investment in developing new routes. Apart from the U.K., significant growth is also expected for Germany during the forecast period due to higher expenditures for the development of new tracks and signals and the maintenance of existing tracks.

• Additionally, in June 2022, Alstom won a USD 155.21 million order from German company Deutsche Bahn (DB) DB Region for the installation of European Train Control System (ETCS) and signaling technology Automatic Train Operating (ATO) received on board the 215 S-Bahn from Stuttgart trains.

Meanwhile, the Northern Europe market is divided between Denmark, Sweden, Finland, and Norway. Sweden was the market leader in 2021 as the Swedish government invested heavily in the development of new lines. In addition to Denmark, significant growth is also expected in Finland during the forecast period, as the costs related to the development of new roads and signs and the maintenance of existing roads increase.

• Additionally, in July 2022, the European Commission announced that it would grant Banedanmark USD 22.7 million to install the ETCS signaling system on 250 km of double track in Western Denmark.

KEY INDUSTRY PLAYERS

Major Market Players are Driving Market Growth through Technological Innovations

Technologically advanced signaling systems and low-cost electric railway fleets are the upcoming industry trends. Implementation of AI-based signaling systems, satellite-based rail tracking, and hybrid rail engines are the key focus of major companies, which will propel the Europe rail infrastructure industry.

LIST OF KEY PLAYERS PROFILED:

• Alstom (France)


• Arriva (U.K.)


• Banedanmark (Denmark)


• Bane NOR (Norway)


• Green Cargo (Sweden)


• Infranord (Sweden)


• Statens Jarnvagar (Sweden)


• TX Logistix (Germany)


• VY Group (Norway)


• VR Group (Finland)

KEY INDUSTRY DEVELOPMENTS:

• June 2022 - Alstom has won a USD 155.21 million order from German company Deutsche Bahn (DB) DB Region for the installation of European Train Control System (ETCS) and signaling technology Automatic Train Operating (ATO) received on board the 215 S-Bahn from Stuttgart trains.


• May 2022 - Bane NOR published a plan to invest USD 1.7 billion to develop railway infrastructure in Trondelag region of Norway


• March 2022 - Bane NOR collaborated with Microsoft to launch an app for digital monitoring of tracks. The data driven app offers insight of track conditions and suggests prerequisite maintenance or other work.


• January 2022 - VR Group and the Ministry of Transport and Communications entered into an agreement for rail transport services till 2030. Under this agreement, VR Group will guarantee the continuation of traffic on unprofitable routes under market conditions. This contract consists of 16% of long-distance rail trips in Finland and 44% of long-distance trains.


• December 2021 - VR FleetCare was appointed to maintain and repair works of Dr19 locomotive for a high-level usability and enhanced equipment maintenance. 

REPORT COVERAGE

The research report provides technical analysis of the market and latest technological advancements, focusing on key aspects such as major market players, COVID-19 effect, rail signaling programs, new investments, and so on. Apart from this, the study provides information on railway electrification along with key industry advancements and trends. Additionally, the study discusses several aspects that are likely to influence the growth of the market over the projection period.

Report Scope & Segmentation