Deutsche Bahn Faces Huge Losses and Historic Low Punctuality in 2024

Deutsche Bahn, Germany’s national railway operator, has posted another significant loss for 2024. Along with this financial setback, the company has recorded its lowest punctuality rate in history, signaling serious challenges for the organization. This is reported by the railway transport news portal Railway Supply.

Deutsche Bahn’s financial struggles in 2024

Deutsche Bahn revealed a loss of approximately $1.944 billion for 2024, a significant improvement over the $2.916 billion loss in 2023. While the loss remains concerning, it marks a reduction of nearly $1 billion from the previous year.

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This continues a streak of financial deficits for the company, which has been losing money annually since 2020. This is a sharp contrast to its pre-2020 years, when it posted annual profits of around $540 million.

The company’s total debt now stands at approximately $34.56 billion. Deutsche Bahn plans to reduce this burden by selling its profitable logistics subsidiary, DB Schenker, to its Danish competitor, DSV.

The company has emphasized that a major factor contributing to its financial struggles has been its infrastructure’s poor condition. Additionally, strikes by the train drivers’ union GDL and weak economic conditions in rail freight transport exacerbated the situation in the first quarter of 2024.

Challenges with punctuality and restructuring plans

In another blow, Deutsche Bahn’s punctuality in long-distance services reached a historic low. Only 62.5 percent of trains arrived on time, marking a concerning performance for the company.

This punctuality issue highlights the challenges Deutsche Bahn faces in maintaining service reliability. Customers are increasingly frustrated as the company struggles to meet expectations.

Deutsche Bahn’s CEO, Richard Lutz, who saw his salary rise to $2.268 million in 2024, including bonuses, acknowledged the company’s dire situation. He described it as the “biggest crisis since the railway reform.”

Lutz admitted that in several key areas, Deutsche Bahn is far from reaching its goals and meeting customer expectations. He emphasized the need for urgent improvements to reverse the company’s fortunes.

To address its ongoing challenges, Deutsche Bahn has implemented a comprehensive restructuring plan. This plan focuses on three key areas: operations, infrastructure, and finances.

The company has already launched large-scale modernization projects, with the aim of improving both service quality and financial performance. Additionally, thousands of jobs, primarily in administrative roles, are being cut to reduce costs and streamline operations.

Looking ahead, Deutsche Bahn has set ambitious goals for the coming years. The company plans to raise its punctuality rate to 80 percent by 2027 and return to profitability this year.

The company’s leadership is optimistic that these changes will help stabilize the organization and restore public trust in its services.

Despite these challenges, Deutsche Bahn remains committed to its long-term goals. The company’s restructuring efforts aim to transform its operations and financial health, ensuring a more reliable and efficient service for its customers.

The coming months will be crucial for the company as it navigates this critical period of transformation.

Source, photo: www.iamexpat.de

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