Swedish rail operator moots price slash plan

Swedish rail operator moots price slash plan
Photo: TT
Swedish national rail operator SJ announced on Thursday that it was planning to slash prices and review its ticketing system in a bid to boost stagnant revenues.

"We can see that the savings package, which we initiated in the beginning of the year, has given results," said  SJ CEO Crister Fritzson in a statement in connection with the presentation for the firm's second quarter report on Thursday.

The firm explained that the cuts, which involved the slashing of some 400 jobs, have created the scope to adjust ticket prices.

The cheapest first class tickets will now be on offer for 295 kronor ($43) and prices for refundable tickets will be slashed by up to 15 percent.

"The price cuts are the first step in a larger review of the company's pricing structure," the firm explained.

SJ's turnover increased by a mere one percent in the period to 4.55 billion kronor, from 4.52 billion in the corresponding period of 2013.

Operating results improved more considerably however to 159 million kronor, up 40 million on the first half of last year and corresponding to an operating margin of 10.8 percent – the firm's highest since 2005.

The firm recognized that many of its customers had been hit by delays and cancellations over the period, citing infrastructure problems.

"Confidence in SJ is dependent on a functioning infrastructure. At the same time SJ of course has to work intensively with cutting delays in those areas which we can affect," Crister Fritzson said.

SJ has now recorded profits for several years following a turn around after a long period of mounting losses and state bailouts. The conditions under which the firm and rail sector operate have however remained a contentious political issue.

The Green Party, which favours massive investment in Sweden's rail networks, called in January for a re-nationalization of the system and resurrect the monopoly status of SJ, a call backed by many Swedes. The issue promises to remain a hotly debated topic as the September general election nears.

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