The purpose of the Network project is to generate target demand and satisfy it effectively through optimising train routes and schedules, the Company’s product portfolio2, and improving the consumer experience of transport services.
In 2016, the Company continued to develop its Daytime Express Programme3. In 2016, these trains carried over 10.2 million passengers (+20.6% year-on-year).
The Company continues to develop the multimodal transportation segment that combines railway and bus services. The Company introduced eight multimodal routes combining train and bus services to increase passenger traffic and improve passenger experience. In 2016, over 75 thousand passengers benefited from multimodal transportation services provided by FPC, which is 1.5 times higher than in 2015.To increase train speeds, the Company has developed the Programme to Increase an Average Speed of Long-Distance Passenger Trains4.
The Programme covers the period from 2017 to 2022 and will be implemented in three stages:
- Stage I (2017–2018);
- Stage II (2019–2020);
- Stage III (2021–2022).
Eleven train pairs will be accelerated on eight routes during Stage I: Saint Petersburg – Belgorod, Moscow – Voronezh, Krasnodar – Adler, Saint Petersburg – Petrozavodsk, Moscow – Belgorod, Moscow – Saransk, Moscow – Bryansk, Moscow – Smolensk.
Double-decker trains, which have proven their cost efficiency, will be another major contributor to the expansion of the Company’s product portfolio.
Double-decker trains run on six routes and enjoy increasing popularity among passengers. In 2016, double-decker trains carried 2.8 million passengers, which is twice as many as in the previous year. The Comprehensive Long-Term Programme to Introduce Double-Decker Passenger Carriages on RZD’s Network5 aims to improve the operational performance of long-distance passenger rolling stock in the context of the infrastructure throughput capacity shortage and lower state subsidies.
Between 2017 and 2020, more than 20 routes for higher-speed double-decker trains will be launched under the Programme, with prices lower than in single-decker compartment carriages, boosting the passenger traffic by 2.6 million people.
An important factor for the successful implementation of the Programme is the Russian Government’s decision to reduce VAT rates for long-distance services to zero, allowing FPC to allocate additional funds to purchasing new passenger carriages to develop its route network.
2 In the context of the Network project, a product means a set of consumer properties provided by the Company to customers on a paid basis. A product is based on tangible components (carriage, route, train, meals, services, etc.); however, the main aspects are its value for the customer and the consistency of the customer experience and perception of using each product. An illustrative example: a future product called Luxury Single would be sold to customers for various routes to travel by single or double-decker carriage with a composting toilet, in a private compartment with free Wi-Fi access, air conditioning unit, hot meals, fresh newspapers and magazines, and slippers, at an average speed of not less than 90 km/h. The product portfolio means the entire range of a company’s products.
3 Daytime trains with high average speeds put on routes where launching trains without reducing infrastructure costs would not be profitable. RZD may not reduce the rates without introducing a pricing cap mechanism, as the rates are set by the FAS of Russia.
4 Approved by RZD Order No. 2028r dated 30 September 2016.
5 Approved by RZD Order No. 2822r dated 30 December 2016.