Signals back to green for Deutsche Bahn

BERLIN:Publicly-ownedGerman rail operator Deutsche Bahn said Thursday it returned to profit in 2016 after its first loss in 12 years, vowing that it would push on with reform under a new boss.

Net profit stood at 716 million euros ($773 million) last year, a rebound from the 1.3 billion euros lost in 2015 as Deutsche Bahn struggled with problems in its freight division, the impact of harsh storms in Germany and repeated train drivers’ strikes.

“2016 was a good year for us,” chief executive and finance director Richard Lutz told a press conference in Berlin -- just one day after the formally taking the reins from former boss Ruediger Grube, who abandoned the top job over disagreements about extending his contract.

Lutz, 52, said Thursday that he will push on with reforms launched by his predecessor rather than switching to a new track.

Since mid-2015, Deutsche Bahn has been tightly focused on quality as it fends off low-cost competition from long-distance bus operators.

In 2017, the group will spend some 7.5 billion euros on upgrading Germany’s rail network, which bear its own trains as well as smaller privately-owned competitors -- a move it hopes will help cut down on delays. - Punctual and connected “We’ve clearly increased the quality of our products and our punctuality,” Lutz said, with “a record number of passengers on main-line trains” last year.

While the rail operator was able to increase punctuality – which it defines as arriving with less than six minutes’ delay – to 79 percent in 2016 and 84 percent so far in 2017, it remains the butt of frustrated but fond jokes among the German public.

The new year has also seen Deutsche Bahn install free wifi service on all of its high-speed ICE trains.

Across Europe, the rail company transported people on some 4.4 billion journeys by train and bus last year, an increase of 81 million over 2015’s figure.

But freight division DB Cargo continues to weigh the firm down, making an operating loss of 81 million euros.

Beyond Germany’s borders, foreign passenger services arm DB Arriva and logistics division DB Schenker face risks from Britain’s vote to quit the European Union.

“We see Brexit and the fall in the value of the pound linked to it as challenges for our business,” said CEO Lutz.

The new boss plans to compensate by expanding Arriva outside Britain, especially into eastern Europe.

Looking ahead to this year, Deutsche Bahn aims to bring in revenues of 41.5 billion euros – around one billion more than 2016 – for an operating profit of at least 2.1 billion euros.