Long-distance tickets are becoming so cheaper that they are currently even depressing inflation in Germany.
BLong-distance tickets are around 16 percent cheaper than a year ago. This emerges from a report by the Federal Statistical Office on the development of consumer prices in Germany. In addition to heating oil (minus 31.3 percent), tickets (minus 16.0 percent) are among the goods and services with the most falling prices in Germany and have pushed the inflation rate down, which was minus 0.1 percent in July .
What’s behind it? After train drivers had to accept price increases for many years, tickets have now apparently actually become significantly cheaper. In two rounds: once through tax breaks as part of the federal government’s so-called climate package at the turn of the year; and then again now as part of the Corona aid programs with the VAT reduction on July 1st. In both cases, the railway apparently passed the tax cut on to a large extent. For all companies in Germany, economists estimate that on average only about half of the latest VAT cut was passed on to consumers. In the case of the inflation rate, that makes up around one percentage point.
Biggest price cut in the history of the railway
Deutsche Bahn speaks of the fact that, taken together, the largest price reduction in the history of the railway has taken place. The main chunk was the price cut at the beginning of the year, which made up around 10 percent of long-distance fares. A reduced VAT rate had already applied in local transport.
The Federal Statistical Office largely confirmed this. In order to measure the price development for tickets, both regular fares and saver fares on certain routes and various other discounts are observed. “The change in long-distance rail traffic in July 2020 compared to the same month last year is mainly due to the two-fold reduction in sales tax in 2020 – in January from 19 to 7 percent, in July from 7 to 5 percent,” said a spokesman. The first step had the greater impact on the ticket price because of the greater tax cut. The Federal Statistical Office also collects the so-called “saver prices” and “flex prices” for representative rail routes using “web scraping” – a process in which data is collected from the network – with various advance booking periods. “The price fluctuations recorded in this way also contributed to a lesser extent to the changes in the price level of long-distance rail travel,” said the Federal Statistical Office.
With a delay: Bahncard also became cheaper
At the beginning of the year it was initially disputed whether the railway should lower the prices for the Bahncard 25 and 50 accordingly. For the Bahncard 100, the network ticket, the same thing happened with the fare. Thereupon there was criticism from, among others, passenger associations. One month late, on February 1st, the prices of the other two Bahncards were also reduced. “Here too, Deutsche Bahn passed the reduction in VAT on to customers one-to-one,” said a rail spokesman. “This means that all Bahncards are around 10 percent cheaper.”
The Deutsche Bahn also passed on the renewed VAT reduction on July 1 to its customers, the rail spokesman continued. The starting price for a long-distance journey is now 17.50 euros for a super saver price in second class without a Bahncard.