GETTING BACK ON TRACK? - How our post-COVID-19 behaviour will change the railway JUNE 2020 - SNC-Lavalin
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GE T T I N G BAC K
ON T R AC K ?
How our post-COVID-19
behaviour will change
the railway
JUNE 2020
atkinsglobal.com | snclavalin.com
NOTICE
This document contains the expression of the No warranty should be implied as to the
professional opinion of experts working for the accuracy of projections. Unless expressly stated
Transport Consulting & Advisory team at Atkins otherwise, assumptions, data and information
Limited (“Atkins”) in response to the COVID-19 crisis, supplied by, or gathered from other sources upon
using its professional judgment and reasonable care. which the experts’ opinion as set out herein is
It is to be read in the context of the methodology, based has not been verified by Atkins; Atkins
procedures and techniques used, assumptions, makes no representation as to its accuracy and
and the circumstances and constraints under disclaims all liability with respect thereto.
which it was performed. This document is intended
for general informational purposes only and Atkins disclaims any liability in respect of the
does not take into account the reader’s specific publication, reference, quoting, or distribution
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developments. This document is meant to be read and reliance thereon by any third party.
as a whole, and sections or parts thereof should
thus not be read or relied upon out of context.
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› The transport consulting and advisory business in Atkins provides its views on the immediate and
longterm behavioural effects on rail travel. Our conclusions suggest that operators, public authorities
and other players in the transport market will have to re-think their actions in the new environment.
› Our studies indicate that new operational measures are likely to make rail operators incur in
additional costs on items such as safety equipment, cleaning and staff training. Our estimates show
an increase in operating costs of 5 to 7% during the Transition Period from lockdown to a New Normal
scenario and 1 to 2% during such New Normal scenario.
› More crucially, in our view, individuals and businesses will adopt new transport habits as they modify
their working, shopping and leisure habits. We estimate that the habits established in the New Normal
scenario could reduce rail passenger demand by 8 to 13%.
› The combined effect of an increase in operational costs and a reduction in demand could affect
operators’ bottom line by 9 to 15%.
Executive Summary
› This report contains the research and analysis › As societies and governments consider how
undertaken by experts in the Transport to lift the restrictive measures in place during
Consulting & Advisory team at Atkins with a the lockdown, we have assessed what the
view of providing a better understanding of future after COVID-19 looks like for transport
the likely impact of COVID-19 on the transport markets, particularly for the passenger rail
industry. We have assessed the potential transport market.
impact on passenger rail operators of new
operational requirements and the changes in › Experience from the past shows that travel
demand habits likely to occur once we reach a behaviour changes during an epidemic period:
New Normal scenario after COVID-19. – The initial effect is that of reduced travelling
› This analysis covers the impact of behavioural because of emergency measures and
changes triggered by the experience of fresh fear.
COVID-19 pandemic that we believe will – Immediately after the event finishes, demand
happen irrespective of the path of global recovers once the residual fear recedes,
economic recovery and government policies which can take months.
once healthcare therapies and/or a vaccine
are available. – If there is any suppressed demand after the
event, it is due to maintaining operational
› We believe that we can apply our approach to measures taken as a response to the event
other transport markets. that users perceive as inconvenient.
› Although this is not the first pandemic that › While the overall response during the lockdown
humanity has suffered (and it is unlikely to period is like previous epidemics, the magnitude
be the last one), COVID-19 is unprecedented of the response and its effect is significantly
because of the scale and duration of our higher. Passenger travel demand is insufficient
collective response to it. There has been no for commercially sustaining any mass transport
other time in which we have halted human business. Also, operators have implemented
activity to the same extent and for such a several measures to increase health and safety
long time. in vehicles and transport hubs, which increase
› Transport, as an activity derived from almost their operational costs and, most times,
any other human activity, especially those that reduce capacity.
require any human contact, has felt the impact
at a level never seen before.
3
› Some countries are starting the Transition › Any new operational measures in the New
Period from a strict lockdown to a full return to Normal scenario will be a less intense version
normal activity. This period is likely to see the of what has been in place during the lockdown
continuation of measures, or recommendations and the Transition Period. Similarly, we believe
of physical distance and enhanced hygiene, with that any new habits will be more a result of a
periods of more severe measures if the number step-change in a trend already in place (e.g.
of COVID-19 cases reaches a level likely to working from home has been increasing slowly
exert excessive pressure on the national for some years) rather than a radical change in
health systems. our lifestyles.
› The duration of this period depends on medical › The new operational measures are likely to
breakthroughs that allow us to understand and make rail operators incur additional costs
fight the disease. However, a range of four to on items such as safety equipment, cleaning
24 months seems a reasonable assumption. and staff training. We estimate that operating
During this time, we expect that operators costs are likely to increase by 5 to 7% during
will continue implementing some measures the Transition Period and about 1 to 2% during
that follow the recommendations of physical the New Normal scenario due to operational
distancing and enhanced hygiene and maintain measures for tackling COVID-19.
a level of preparedness for more severe
travel restrictions. › We anticipate that individuals and businesses
will adopt new transport habits as they change
› We believe that the experience of COVID-19 some of their working, shopping and leisure
will, on the one hand, make us, as a society, habits. Working habits are the ones which may
reconsider the danger of pandemics. On the be more affected, as a significant proportion
other hand, the long lockdown and recovery of office workers have become accustomed to
period will allow us time to develop, test and carrying out their jobs away from the offices.
build new habits in our daily lives. We expect We estimate that the habits established in
that these changes will create a New Normal the New Normal scenario could reduce rail
scenario in which rail and other transport passenger demand by 8% for long-distance,
operators will implement new operational 11% for regional and 13% in commuter markets.
measures in line with society’s awareness
of pandemic threats, and individuals and
businesses will develop new habits that require
less mobility, as they have learnt to undertake
certain activities without travelling.
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Contents
1. INTRODUCTION 6
1.1 SCOPE OF WORK 6
1 .2 Q UA L I F I C AT I O N S 7
2. L E A R N I N G F R O M H I S T O RY 8
2.1 LESSONS LEARNT 9
3. THE TR ANSPORT MARKET DURING LOCKDOWN 12
3.1 INTRODUCTION 12
3 .2 I M PAC T O N M O B I L I T Y 12
3.3 M E A S U R E S I M P L E M E N T E D BY P U B L I C T R A N S P O R T O P E R AT O R S 14
4. THE TR ANSITION PERIOD 18
4. 1 INTRODUCTION 18
4.2 R EC O V E RY T I M E L I N E 19
4. 3 O P E R AT O R R E S P O N S E 20
5. A N E W N O R M A L S C E N A R I O A F T E R C O V I D -1 9 22
5.1 INTRODUCTION 22
5 .2 N E W O P E R AT I O N A L M E A S U R E S A N D T H E I R C O S T S 23
5.3 N E W H A B I T S A N D T H E I R I M PAC T O N D E M A N D 31
5
1. Introduction
The transport industry has seen severe affects from the COVID-19
outbreak all over the world. While we are starting to understand
the short-term effects of the confinement measures adopted by
governments to control the pandemic, the subsequent effects on
the economy and social behaviours remain uncertain.
1.1 Scope of work
With this report, the experts are the Transport outbreak on mobility patterns that may develop
Consulting & Advisory team at Atkins intend during or as a response to the outbreak. We
to provide a better understanding of the likely know that transport operators, and the rest
impact of COVID-19 on the transport industry of the stakeholders in the transport industry,
and consider the impact on the transport sector will respond to the new demand requirements.
of potential future scenarios. Our analysis covers However, our analysis focuses only on travel
the impact of new operational requirements and demand response caused by changes in social
changes in demand habits on the rail behaviour. We believe that we can apply our
passenger market. approach to other transport markets.
Our aim is to determine the demand reaction to The table below includes the specific questions
the likely long-term consequences of COVID-19 we intend to respond with our analysis.
Areas of During lockdown Transition back New normal
analysis to normal
Potential › What is reduction › How will we reinstate › Is there any reason
market demand in the size of the freedom of movement? mobility may need to
transport market Will there be a need to reduce?
demand? impose regulations on
that matter?
Demand drivers › How likely is the › Which long-term
passenger market to trends are likely to gain
recover to its previous momentum?
situation?
Operational › What operational › What operational › What operational
requirements measures need to be measures will we need measures are likely to
put in place? to impose on transport continue in the future?
operators in this period?
› What is their likely
› What is their likely impact impact on costs?
on costs?
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This report is structured as follows: 1.2 Qualifications
› In Section 2 we review evidence from the
past to understand the effects of epidemic We believe we are living unprecedented times
episodes and other external shocks on that will influence our habits and views once we
transport markets. lift the bulk of the measures taken to respond
to the pandemics. However, we know that with
› In Section 3 we assess the impact of the COVID-19 the future epidemiological and health
lockdown on transport demand and the scenario, together with the lifting of most
measures implemented by rail operators during measures will determine any New Normal. Both
this period. questions remain unknown at the moment.
› Section 4 considers the Transition Period For this piece of work, we assume that there will
from lockdown to a New Normal scenario. We be a medical solution to COVID-19 that allows
discuss the timeline of the transition, and the societies to cope with it, as we do with other
operational measures that rail operators are viruses such as influenza. Our assumptions
considering. include that we will find such a solution at some
point in the next 24 months and that, during
› Section 5 covers the impact of a potential New that period, societies will manage potential new
Normal scenario on the transport market. We waves of the virus with similar but less stringent
assess the impact on cost and the impact on measures such as the ones in place in most
demand of those operational measures and countries in March 2020.
new habits respectively that may remain in this
scenario.
7
2. LEARNING
FROM HISTORY
This is not the first time that humanity has faced
a pandemic. As in previous pandemics, travelling
2.1 Lessons learnt
has facilitated its spread geographically. We can › External global shocks that give rise to safety
learn some lessons looking at past epidemic and security concerns around using mass
events and their impact on travel demand transport cause changes in travel behaviour,
and habits. reducing the demand for mass transport.
During World War I, labourers working in France › There is a reduction in mass transport use
spread the virus by rail to Spain and Portugal. because of fresh fear (produced immediately by
However, there is no study available on the the external shock) that then recovers.
impact of the Spanish flu on the rail market.
› The duration of the recovery period depends on
Epidemic episodes in the 21st have spread by the time takes for the residual fear (dissipation
air. There are several studies and analysis of the of the fresh fear produced in previous days) to
impact of the latest epidemics on the aviation recede. In the cases considered in this chapter,
market. Severe Acute Respiratory Syndrome these have been a matter of months.
(‘SARS’) outbreak in 2003, the Avian influenza
H5N1 threat in 2006 and the Swine influenza › Any lasting effect on demand has to do
H1N1 pandemic in 2009 were all initially localised with the measures taken, and kept in place,
outbreaks that developed into subsequent as a response to the external shock. The
pandemic or pandemic-threat epidemics after inconvenience, from a passenger perspective, of
spreading through the modern transport network. the stricter safety airport measures implanted
after 9/11 has had a lasting effect on the air
Besides pandemic events, another significant travel demand, and commercial yields.
event that changed people’s behaviour due to
concerns about using public transport was the 9/11 terrorist attack, 2001
September 11 terrorist attacks (also known as
› 9/11 had a large temporary impact which reduced
9/11) in 2001.
travel demand by over 31% for about four to
We have analysed these events to understand five months. Once the fear subsided, demand
how their impact on transport industry demand picked up again. However, factors such as the
and other related factors. increased ‘hassle’ of travel due to new security
requirements permanently reduced the level of
travel demand by over 7% 1.
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Figure 2.1 The number of airline passenger dropped significantly immediately after the 9/11 terrorist attack in 2001
U.S. Airline Passengers Actual and Deseasonalised
80
70
60
50
40
30
Deseasonalised
20
Actual
10
0
Jan 99 Jan 00 Jan 01 Jan 02 Jan 03 Jan 04 Jan 05
Source: U.S. Department of Transportation, (2005), “Airline Travel Since 9/11”, Bureau of Transportation Statistics,
Issue Brief Number 13, December 2005
Figure 2.2 Airlines reacted to the drop in demand after the 9/11 terrorist attack in 2001 by reducing the number
of available seats
U.S. Airline Available Seats Actual and Deseasonalised
100
80
60
Deseasonalised
Actual
40
20
0
Jan 99 Jan 00 Jan 01 Jan 02 Jan 03 Jan 04 Jan 05
Source: U.S. Department of Transportation, (2005), “Airline Travel Since 9/11”, Bureau of Transportation Statistics,
Issue Brief Number 13, December 2005
› As a response, U.S. network carriers shifted the capacity from domestic to international markets in
the post 9/11 market conditions to tackle the competition from low-cost domestic carriers 2.
› For US network carriers, it took about 3 years to achieve pre-9/11 levels of air passenger demand 2.
› Even acknowledging for a structural downtrend in airfares due to market liberalisation and the impact
of increasing low-cost competition, airfares (domestic yields) by 2006 were still 10% below where
they would otherwise have been as a result of the 9/11 terrorist attacks 1.
1
https://www.iata.org/en/iata-repository/publications/economic-reports/impact-ofsept-11th-2001-attack/
2
https://www.bts.gov/sites/bts.dot.gov/files/legacy/publications/special_reports_and_issue_briefs/issue_briefs/num-
ber_13/pdf/entire.pdf 9Severe Acute Respiratory Syndrome (SARS), 2003
› Severe Acute Respiratory Syndrome (SARS) › Almost all the airports affected showed a
emerged in late 2002 in the Guandong province significant decrease in passenger traffic in
of the People’s Republic of China. They identified 2003. SARS led to a year-on-year reduction of
the causative pathogen at the end of February -20% and -14.9% at Hong Kong International
2003, and the incidence of cases peaked in the Airport (HKIA) and Singapore Changi Airport
second quarter of 2003 in China, and various (SCA) respectively. For the three-month
other countries . SARS epidemic in 2003 caught period between March to May 2003, after
the world off-guard as states were unprepared implementing control measures, statistics
for a pandemic threat of such scale. showed a 77.6% and 57.0% drop in passenger
traffic for HKIA and SCA, respectively.
› Overall, the SARS epidemic had a heavy
impact on the airport business. It also › Public perception of the risk propagated with
exposed the unpreparedness in airports and fresh fear (produced by the daily announced
countries towards pandemic control in the SARS cases) and the residual fear decayed
highly connected aviation age. The epidemic exponentially. In Taipei, estimates showed that
established a benchmark for the aviation the e-folding time was about 28 days . This
industry and airport authorities in terms of duration of time reflects the perception of
pandemic control measures standards. the risk perceived by the normal underground
passengers. The longer the e-folding time, the
slower the return of the ridership.
Figure 2.3 Train and bus passenger demand in Beijing dropped abruptly as the number of SARS peaked
Source: Beutels, Philippe; Jia, Na; Zhou, Qing-Yi; Smith, Richard; Cao, Wu-Chun; de Vlas, Sake J; (2009) “The economic impact of
SARS in Beijing, China”. Tropical medicine & international health, 14 Sup. pp. 85-91. ISSN 1360-2276.
10 // GETTING BACK ON TRACK› The impact of SARS on Beijing shows that there › Despite a negative impact on airport business
was a substantial impact on people’s travel globally, the extent of the average decrease
habits, with a steep decrease in travel on buses, was significantly less than that in 2003 SARS
compared to a year earlier . The figure below epidemic. Most airports reported a year-on-
also suggests that once the pandemic was year decrease of about 1% to 5%, with Tokyo
over, public transport started recovering in the International Airport affected most severely by
following three months. a 7.2% decline. Other airports in the pandemic’s
area, such as HKIA and SCA, recorded
Avian influenza, 2006 smaller year-on-year declines, 4.8% and 1.3%
› In 2006, most airports recorded a positive respectively.
performance in passenger traffic volume. This
› When focussing on the 3-monthly post-
was an unexpected result as the World Health
implementation period between March to May
Organization (‘WHO’) issued strong warning
2009, there was only a slight drop in passenger
messages against grim pictures of the H5N1
traffic of 7.9% and 4.1% in HKIA and SCA,
outbreak in mid-2006.
respectively.
› This time the lessons from 2003 SARS
epidemic were still fresh in the minds of
aviation operators, and avian influenza had
lower inter-human transmissibility.
Swine flu, 2009
› Although the swine flu H1N1 caused a
significant impact on business in airports
worldwide, concerted pandemic control
measures appeared to have delivered screening
protection while minimising disruptions to
airport business. It was apparent that the
measures required further refinement, both in
terms of effectiveness and efficiency.
3
https://www.sciencedirect.com/science/article/pii/S0969699715000174
4
e-folding time is the interval in which an exponentially growing quantity increases by a factor of e (e=2.718).
This is analogous to doubling time calculated on base-e instead of base-2.
5
https://journals.plos.org/plosone/article?id=10.1371/journal.pone.0089405
6
https://onlinelibrary.wiley.com/doi/full/10.1111/j.1365-3156.2008.02210.x 113.THE TRANSPORT
MARKET DURING
LOCKDOWN
3.1 Introduction Figure 3.1: Map of government responses to COVID-19.
Most governments in Europe have adopted stringent
measures against the spread of COVID-19 by the end of
Governments have taken a wide range of measures April 2020
to confront the COVID-19 outbreak. In most
countries, such measures have limited mobility
significantly. In Europe, most governments have
adopted some form of lockdown.
In this section, we show how the lockdown has
affected mobility and the measures implemented by
rail operators during this period.
Source: Oxford COVID-19 Government Response Tracker;
https://www.bsg.ox.ac.uk/research/research-projects/coronavirus-
government-response-tracker (accessed on 5th May 2020).
3.2 Impact on mobility Although there are some differences by transport
market, demand have dropped by between 85%
The lockdown and other measures adopted by most and 95%.
countries has triggered an unprecedented reduction Air market is maybe the most notable example, as
of transport demand. the whole global industry has been brought to a halt.
Figure 3.2 Air travel dropped as COVID-19 epidemic spread around the world
MILLION
250
ORIGINALLY-PLANNED SEATS CAPACITY
200
150
ACTUAL
PASSENGER NUMBER SEATS
CAPACITY
OFFERED
100
COVID-19 PANDEMIC
DECLARATION ON MARCH 11
50
0
JAN-19 FEB-19 MAR-19 APR-19 MAY-19 JUN-19 JUL-19 AUG-19 SEP-19 OCT-19 NOV-19 DEC-19 JAN-19 FEB-20 MAR-20 APR-20
Source: ICAO; (2020) “Effects of Novel Coronavirus (COVID-19) on Civil Aviation: Economic Impact Analysis”, version dated on 4th May 2020.
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1 TRACKFigure 3.3 Mobility in London started declining when the Government recommended working from home one
week before lockdown
10%
LOCKDOWN START DATE
0%
-10%
-20%
-30%
-40%
-50%
-60%
-70% Places for work
-80% Public transport hubs
-90%
-100%
15/02 20/02 25/02 01/03 06/03 11/03 16/03 21/03 26/03 31/03 05/04 10/04 15/04
Source: Own analysis based on Google Mobility data
Figure 3.4 Mobility in Lombardy started declining on the last week of February after the number of
Covid-19 deaths escalated
10%
LOCKDOWN START DATE
0%
-10%
-20%
-30%
-40%
-50%
-60%
Places for work
-70%
-80%
Public transport hubs
-90%
-100%
15/02 20/02 25/02 01/03 06/03 11/03 16/03 21/03 26/03 31/03 05/04 10/04 15/04
Source: Own analysis based on Google Mobility data
Figure 3.5 Mobility in Paris started declining a week before they announced the lockdown
10%
LOCKDOWN START DATE
0%
-10%
-20%
-30%
-40%
-50%
-60%
-70%
-80%
-90%
Overall mobility
-100%
02/03 07/03 12/03 17/03 22/03 27/03 01/04 06/04 11/04 16/04 21/04 26/04
Source: Own analysis based on Citymapper data
133.3 Measures implemented by › Increased cleaning frequency of air conditioning
filters in passenger vehicles and driving cabs,
public transport operators with observed cycles being daily for disinfection
of filtering screens and weekly for cleaning of
The decrease in passenger level and the the interiors of air ducts.
enforcement of lockdown measures have driven
public transport operators to reconsider their › Additional disinfection of night trains
service operations. This section sumarises the compartments with full replacement
operational measures adopted by transport of personal use items such as blankets
operators worldwide to prevent the spread of and pillows.
COVID-19 and ensure serviceability during the
In some cases, there have been swift
lockdown period.
implementations of forward-thinking investments
Deep cleaning and preventive disinfection in new technology and automation on a business
scale, such as:
Many have implemented stricter standards
for cleaning and disinfection of vehicles and (i) The deployment of a fleet of 20 robots to
special risk surfaces on a global scale, on the assist in deep cleaning subway trains and
wave of measures trialled in China and other stations of Hong Kong’s Mass Transit Railway
Asian countries at the inception of the pandemic (‘MTR’); and
outbreak. The consensus is being observed in the
following measures: (ii) Using dry vapour steam cleaners to disinfect
rolling stock surfaces (seats, floors, windows
› Cleaning and disinfection of windows, lockers, and toilets) trialled and implemented by the
magazine racks, tables, door handles and Polish regional railway operator Koleje Śląskie
buttons, hand sanitisers, arm rests and hand and Tramwaje Śląskie operating tram lines in
rails, with increased frequency and up to a the Silesian Metropolitan Area.
cleaning cycle after completion of each trip.
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1 TRACKPre-boarding screening
To prevent contagion and ensure the health and › The International Air Transportation Association
safety of staff and customers, operators are (‘IATA’) released guidance and specifications
including health check-ups and screening as part on pre-boarding and in-flight temperature
of the latest pre-boarding measures: screening for passengers in its latest Guideline
for Airlines.
› Shenzhen Bus Group has been undertaking
screening of staff temperature at the entrance › As an additional pre-boarding measure at
into office facilities and before the start of each Abu Dhabi Central Bus Station, germ-killing
working shift. gateways are now in use at the passenger
entrance of terminals and stations.
15Personal protective equipment Protective and buffer areas
and sanitary materials
As governments and local authorities continue
Transport operators had to rethink their to use social distancing measures to slow down
procurement and inventory plan during the the spread of COVID-19, transport operators have
lockdown, to face the increasing need of reduced the passenger capacity of their fleet
protection kits and sanitary materials. Typical and have enforced further measures to ensure
items being bought include facial masks, staff safety. Many operators in Asia and Europe
single-use disposable gloves, alcohol-based are using protective and buffer areas within
gel and soap, biohazard bags, disinfectant the compartments:
spray and touch-free thermometers. Measures
already implemented by transport operators in › In the bus sector they have installed Plexiglass
Asia envisage: panels and temporary plastic tape barriers
to protect drivers and ticket sellers. Similarly,
› Strict control and inventory in the procurement several rail operators have suspended the
process, and allocation of seats nearby the driver’s cabin,
thus creating an onboard buffer zone; and
› Introduction of rolling purchases to ensure a
continuous supply of equipment to staff. › Bus and train operators have been considering
reductions of the maximum passenger capacity,
the latter implementing bespoke seat allocation
systems to ensure the minimum safety distance
between passengers.
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1 TRACKOther social distancing and Communication to passengers and
preventive measures general public
Many are implementing additional measures The spread of misinformation and increase of
during the lockdown to increase staff and fear has induced transport operators to enforce
passenger safety and ensure compliance with communication campaigns to passengers
recommendations published by governments and and the general public, aiming to promote
the WHO: social distancing behaviour and increase the
general public’s perception of reliability and
› The Italian rail operator Trenitalia and some trustworthiness in public transport companies.
bus operators in Italy have installed hand gel Measures observed comprise:
dispensers onboard of their train and bus fleets;
› Visual communication (infographics and
› Shenzhen Bus Group in China has restricted pictograms) installed at stations and onboard to
access to its buses to those passengers advise passengers on appropriate measures to
wearing protective masks only; and limit the spread of COVID-19 and actions people
› There has been a suspension of onboard must take should they show symptoms during
catering services by passenger rail operators, travel;
with IATA recommending the provision of pre- › Reassurance on the adoption of additional
packaged food and bottled drink water in its cleaning procedures and reliability of the
Guidance for Cabin Operations During and Post transport system;
Pandemic . Also, Shenzhen Bus Group has put
in place a stricter control and traceability of › Encouragement to using online ticket
food supplies. purchasing; and
› Continuous communication of changes
affecting timetables and routes.
7
IATA (2020), “Guidance for Cabin Operations During and Post Pandemic”, 1st edition published on 22nd
April 2020. https://www.iata.org/contentassets/df216feeb8bb4d52a3e16befe9671033/iata-guidance-
cabin-operations-during-post-pandemic.pdf 174.THE TRANSITION
PERIOD
4.1 Introduction
We expect that there will be a Transition Period that sees the lifting of hard lockdowns until we
reach a New Normal scenario in which the perception of COVID-19 shifts to a known and treatable
health threat.
In this section, we discuss what the likely timeline of such Transition Period and the operational
measures that rail operators are likely to implement.
We will not discuss demand during the Transition Period because of the high level of uncertainty
around demand drivers in this period. We believe that, during this period, policy measures will drive
demand (e.g. which industries can resume their operation, under which condition can certain industries
reopen, etc.) and the extent and magnitude of residual fear in the society will depend on the level of
our understanding of the disease. Policy decisions are being reviewed at very short timescales as the
disease and our understanding of it develops. We anticipate that this situation will continue during the
Transition Period until we find a reliable medical solution.
4.2 Recovery timeline
A Transition Period is likely to be characterised › Although, we may have reached the peak
by the continuation of measures, or of the first wave of the epidemic in most
recommendations, of physical distance and countries of Western Europe, there seems to
enhanced hygiene, with periods of more sever be a consensus within epidemiologists and
measures if the number of COVID-19 cases virologists that further waves are likely to occur
reach a level that is deemed to exert excessive in the coming months.
pressure on the health system. During this
period, especially if a vaccine is not available, the › The duration and intensity of any subsequent
population is likely to be fearful of contagion and epidemic waves will depend on the available
take some measures to avoid contact, including medical solutions and any social and political
reducing their mobility, irrespective of any measures taken to contain them. We are of the
recommendations made by their political leaders. view that we will learn from this first wave,
enabling better preparation for any subsequent
The duration of such Transition Period waves. For that reason, we anticipate that the
is uncertain. intensity of subsequent waves will be lower and
that any measures taken for their containment
will be more lenient than those implanted in the
current lockdown.
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1 TRACKFigure 4.1 Social distancing measures may happen recurrently until we achieve a vaccine or other solution
1400
1200
WEEKLY ICU CASES
1000
800
600
400
200
0
MAR-20 MAY-20 JUL-20 SEP-20 NOV-20 JAN-21 MAR-21 MAY-21 JUL-21 SEP-21 NOV-21
Figure 4: Illustration of adaptive triggering of suppression strategies in GB, for Ro=2.2, a policy of all four
interventions considered, an “on” trigger of 100 ICU cases in a week and an “off’ trigger of SO ICU cases. The policy
is in force approximate 2/3 of the time. Only social distancing and school/university closure are triggered; other
policies remain in force throughout. Weekly ICU incidence is shown in orange, policy triggering in blue.
Source: Imperial College COVID-19 Response Team, (2020), “Report 9: Impact of non-pharmaceutical
interventions (NPIs) to reduce COVID-19 mortality and healthcare demand”
A range for this Transition Period could be from social distancing measures are only initiated
4 to 24 months. when the number of ICU patients exceeds a
certain “on” threshold and are relaxed when
› The lower bound assumes resuming our ICU cases falls below a certain “off” threshold.
normal activity with the new school year
in September 2020 and no second wave of We consider that the Transition Period will be
COVID-19. At the moment, this scenario is long enough for people to develop new habits
considered very unlikely, if only because there that are likely to have a long lasting impact on
will not be a vaccine by that time. transport demand.
› The upper bound is loosely based on a scenario
considered by the Imperial College COVID-19
Response Team on 16th April 2020 in which
194.3 Operators response
In the wider context of lockdown restrictions As containment of operational costs and demand
relaxation, we may see the pairing up of recovery will be key during the Transition
preventive measures implemented by transport Period, we can expect the implementation of
operators during the lockdown (see Section 3.3) new technology-driven measures on a business
with additional efforts and policies. Additional scale, as operators focus on limiting disruptions
actions ensuring passengers’ safety and service to passenger and increase the trust in the public
reliability include: transport sector.
› Presence of cleaning staff onboard during long- Some examples of new technologies that rail
haul travels; operators are currently trialling and which could
prove beneficial in reshaping the new operational
› Removal of non-essential items from passenger standards are:
carriages such as magazines, booklets, menus,
blankets, pillows; › Titanium dioxide is being trialled by the Polish
Regional Railway Operator (Koleje Śląskie)
› Retention of reduced passenger capacity for sanitising its train fleet and ticket vending
with the allocation of buffer areas within machines, with outcomes showing a reduction
passenger carriages; of bacteria inside the carriages up to 99%; and
› Compulsory requirement for all passengers to › Tests on ultraviolet lamps for disinfecting
wear protective masks while onboard; trams and buses are being observed in Krakow
› Enforcement of passenger health requirements and Shanghai where disinfection operations
including pre-boarding passenger temperature take place inside the fleet depots, in two phases
screening for medium to long-distance trains, (front and rear part of the vehicles) and have an
onboard temperature check, health declaration approximate duration of 7 minutes.
forms and point-of-arrival quarantines; and › Russian Railways (‘RZD’) partnered with
› Blocked seats and other ticket Siemens Mobility for installing 3D printed
sales restrictions. attachments for door handles on toilet and
driver cabs inside the Lastochka trains running
within the Moscow Areas. The devices help
to reduce the spread of COVID-19, enabling
passengers and staff to open and close the
doors with an elbow or lower arm.
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G I BNAGC KB OANC TKR AOC N
K TRACKThe shift to a new framework of operational standards will require transport operators to implement
training and emergency plans across their business, with particular focus on:
› Staff training on procedures for disinfection › Implementation of emergency monitoring
of surfaces and facilities, assistance to sick rooms for prevention and control during
customers and effective communication in service operations, trialled and implemented
response to concerns on measures taken to by Shenzhen Bus Group during the
prevent the spread of COVID-19; pandemic outbreak.
› Establishment of emergency plans for
the handling of suspected cases detected
during travel, including procedures for swift
isolation, disinfection of the area, interviews
to ill travellers as support to local authorities
and transfer of sick travellers to health care
premises; and
215. A NEW NORMAL
SCENARIO AFTER
COVID-19
5.1 Introduction
New Normal will be the future version of Lockdowns have forced us to try alternative ways
Business As Usual today. It will be shaped by of working, studying, shopping and carrying out
the impact, habits and learnings from COVID-19 many of our everyday activities. We are having
during the lockdown and the Transition Period. the time to test how well those alternative ways
We believe that once the Transition Period is over work for us and build new habits.
or about to finish, people are likely to make travel
decisions differently. Our New Normal scenario assumes that
there will be widespread available healthcare
Past epidemic events like SARS and swine flu therapies and / or a vaccine to COVID-19. That
show that, after a rapid and significant reduction is, there will be no residual fear that would
of passenger demand during the pandemic affect the behaviours of travellers, operators
spread, demand picks up after four to five and policymakers.
months, when fear has subsided. However, those
events did not require the scale and duration of
response that we are undertaking with COVID-19.
5.2 New operational measures and their costs
Rail operators are likely to incur additional We estimate that operating costs are likely to
operational costs on items such as safety increase from the current cost base by 5 to
equipment, cleaning and staff training even once 7% during the Transition Period and about 1
the lockdown and Transition Period is over. We to 2% during the New Normal scenario due to
are likely to increase, as societies, our awareness operational measures for tackling COVID-19.
of the dangers of pandemics and recognise the
need to adopt certain measures that improve
our preparedness.
2 22 / // / G EGT ET ITN TG I BNAGC KB OANC TKR AOCNK
2 TRACKAssessment of operational measures
Some measures that we implement during the lockdown will remain in the Transition Period. During
the New Normal scenario, we would expect that the only measures that would remain are those
that we consider necessary for improving the resilience and preparedness of the rail system for
future pandemics.
Operational Probability to be in place during Lockdown Probability to be in place during the
Measure and Transition Period New Normal scenario
Partially loosened in the New Normal scenario,
Routine cleaning Already implemented on a global scale during
particularly regarding cleaning frequency / cycles.
and preventive Lockdown and likely to remain in the Transition
Implementation of new technologies and automation
disinfection Period across all the transportation sector.
is possible to reduce operational and cost impacts.
Operators may discontinue general use, but are likely
Temperature Potential implementation at pre-boarding for intra-
to need to maintain a stock for potential deployment
screening regional / international rail travels.
on epidemic emergencies
Already implemented on a global scale during
PPE and sanitary Additional measures likely to cease in the New
Lockdown and likely to remain in the Transition
materials Normal scenario.
Period across all the transportation sector.
Already implemented by several rail operators in
Protective / buffer Additional measures likely to cease in the New
Europe (i.e. Trenitalia) and to be maintained during
areas Normal scenario.
the Transition Period.
Additional measures such as restrictions to catering
Other social Additional measures likely to cease in the New
service or installation of on-board hand sanitisers
distancing measures Normal scenario.
could increase users’ safety perception
Training on emergency situations and customer
care has already been launched in several countries
Staff Likely to be considered a new standard requirement
and will probably become a new training standard
training in the New Normal scenario.
for transportation staff serving at stations and
on-board.
Emergency plans are considered necessary
Emergency during the Lockdown and Transition Period to Likely to be considered a new standard requirement
plans deal effectively with emergency cases and ensure in the New Normal scenario.
passenger safety.
External
communication Already in place during Lockdown and likely to Partial dismissal in the New Normal scenario
to customers and remain in the Transition Period. (general measures of hygiene and social behaviour
general public may remain), as the public absorbs changes in habits
and timetables.
Legend
Likely to be implemented / retained
Partially implemented with potential relaxation / dismissal
Unlikely to be implemented / retained
23Cost assumptions The above operational measures in railways to tackle and reduce the impact of COVID-19 will incur additional costs. It is important to understand the assumptions behind the cost. › The first key assumption here is that these cost changes are based on the ‘standard timetable’ (i.e. it does not include any change in cost that may result of timetable changes because of COVID-19 during the Transition Period or changes in demand in the New Normal scenario due to triggered by new travel habits). › The cost impact will be different for the Transition Period and the New Normal scenario as the intensity of operational measure will be different. › We can divide Rail operational costs into the following categories: › Staff costs; › Fuel costs; › Rolling stock charges; › Franchise payments to the government; › Corporation tax; › Network Rail charges; and › Other costs. However, we only expect to see an impact on the categories Staff costs, Franchise payments to the government and Other costs as a result of COVID-19 operational measures. 2 44 / // / G EGT ET ITN TG I BNAGC KB OANC TKR AOC NK 2 TRACK
Assumptions for Transition Period
We assume that any costs related to Franchise payments to government will not be impacted as we
assume that TOCs in the UK will continue running under management contracts during the Transition
Period, as they are doing during the lockdown.
Operational Measure Cost Assumptions
› Additional Cleaning Staff requirement.
Staff cost
Routine cleaning and preventive › Additional working hours for existing staff.
disinfection
Other cost › Additional Material & Equipment
› Additional Staff for Monitoring & Action
Staff cost
Temperature screening
› Screening equipment cost & IT/software
Other cost
support for analytics.
› New PPE and sanitary materials for staff and
PPE and sanitary materials Other cost
key workers
› Labour, material and equipment for creating and
Protective / buffer areas Other cost
maintaining Protective / buffer areas
Other social distancing › Change in raw materials and supplies
Other cost
measures › Reorganisation of catering services.
Staff training Staff cost › Additional staff training
› Assessing and developing the plan on regular
Emergency plans Other cost
basis in real time.
External communication to
Other cost › Additional adverts and communication
customers and general public
25Assumptions for the New Normal scenario
We assume that in the New Normal scenario there will be an additional cost due to increased insurance
premium or parent company support to cover any potential costs associated with epidemic situations in
the future. We have allocated such cost to the Franchise payments to the government.
Operational Measure Cost Assumptions
› Additional (but reduced) Cleaning Staff
requirement
Staff cost
Routine cleaning and › Additional (but reduced) working hours for
preventive disinfection existing staff
Other cost › Additional (but reduced) Material & Equipment
Temperature screening Other cost › Additional (but reduced) Material & Equipment
PPE and sanitary materials NA
Protective / buffer areas NA
Other social distancing
NA
measures
› Staff training incorporated as regular event
Staff training Staff cost
for preparedness
Franchise
› Insurance premium increase subsidy
payments to
requirement
government
Emergency plans
Other cost › Future Emergency Planning
External communication
Other cost › Additional (but reduced) adverts and
to customers and general
communication
public
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2 TRACKEstimating the cost impact of operational measures
› The cost impact is the estimated percentage
increase from the cost base caused by Scale Cost increase Mid-Point
implementing the operational measures 0 Less than 1% 0.5%
discussed in the previous section. We have
assumed that the cost base comprises the 1 0-2% 1.0%
average cost split observed in the rail year 2 2-5% 3.5%
2018/19 for each type of rail operator (i.e.
commuter, regional and long-distance). 3 >5% 5.0%
› We assessed the cost impact of each
operational measure for the Transition Period
and New Normal scenario using a graded scale
(shown below). Although we consider that cost
estimates should be a range of values given the
uncertainty and variety of operators, we have
used the mid-point of the range for assessing
the total impact on the average train operator
per type.
Cost impact of operational measures for commuter operators
We estimate that the additional costs during the Transition Period will be larger than those expected in
the New Normal scenario. This will result from the withdrawal of certain measures that are no longer
required and the scaling down of those that remain.
Transition Period New Normal scenario
payments to
payments to
government
government
Other costs
Other costs
Operational Measure
Staff costs
Staff costs
Franchise
Franchise
Routine cleaning and preventive disinfection 2 - 1 0 - 1
Temperature screening 2 - 2 - - 1
PPE and sanitary materials - - 2 - - -
Protective / buffer areas - - 1 - - -
Other social distancing measures - - 2 - -
Staff training 2 - - 1 - -
Emergency plans - - 2 - 2 0
External communication to customers and - - 1 - - 0
general public
27Cost impact of operational measures regional operators
› During the Transition Period, we expect the › We expect all other cost impacts to be of
cost increase of Protective / buffer areas similar magnitude as for commuter operators.
and Other social distancing measures to
be smaller for regional operators than for
commuter operators.
Transition Period New Normal scenario
payments to
payments to
government
government
Other costs
Other costs
Operational Measure
Staff costs
Staff costs
Franchise
Franchise
Routine cleaning and preventive disinfection 2 - 1 0 - 1
Temperature screening 2 - 2 - - 1
PPE and sanitary materials - - 2 - - -
Protective / buffer areas - - 0 - - -
Other social distancing measures - - 1 - -
Staff training 2 - - 1 - -
Emergency plans - - 2 - 2 0
External communication to customers and - - 1 - - 0
general public
Cost impact of operational measures long distance operators
› During the Transition Period, we expect the › We expect all other cost impacts to be of
cost increase of Protective / buffer areas similar magnitude as for commuter operators.
and Other social distancing measures to be
larger for long-distance operators than for
commuter operators.
Transition Period New Normal scenario
payments to
payments to
government
government
Other costs
Other costs
Operational Measure
Staff costs
Staff costs
Franchise
Franchise
Routine cleaning and preventive disinfection 2 - 1 0 - 1
Temperature screening 2 - 2 - - 1
PPE and sanitary materials - - 2 - - -
Protective / buffer areas - - 2 - - -
Other social distancing measures - - 3 - -
Staff training 2 - - 1 - -
Emergency plans - - 2 - 2 0
External communication to customers and - - 1 - - 0
general public
2 88 / // / G EGT ET ITN TG I BNAGC KB OANC TKR AOCNK
2 TRACKOutcomes for the rail industry
New operational measures are likely to make rail operators incur in additional costs that will increase
their operating costs between 5 and 7% during the Transition Period and 1 and 2% during the New
Normal scenario.
Cost impact for commuter operators
› We estimate that commuter rail operators are › While staff costs for Routine cleaning,
likely to see their costs increase by around 5% Temperature screening and Staff training are the
due to new operational measures during the largest contributors to the overall cost increase
Transition Period. We expect that figure to be in the Transition Period, in the New Normal
around 1.8% in the New Normal scenario. scenario, the largest contribution comes from
Franchise payments to the government due to
emergency plans.
Figure 5.1 Estimated cost impact for commuter operators
Transition Period New Normal scenario
108%
106% 0.6% 0.2%
0.6%
0.6% 0.2%
104% 0.6% 105%
0.7% 0.2%
0.7%
102% 0.7%
100%
100%
98%
96%
Routine cleaning and preventive
Routine cleaning and preventive
Temperature screening-Other
Other social distancing measures-
New Normal scenario
Temperature screening-Staff costs
PPE and sanitary materials-Other
Base Costs
Protective / buffer areas-Other
Staff training-Staff costs
customers and general public-
Emergency plans-Other
External communication to
disinfection-Staff costs
disinfection-Other
Other
Other
29Cost impact for regional operators › Similar to commuter TOCs, staff costs for
Routine cleaning, Temperature screening and
› We expect that rail costs are likely to increase Staff training are the largest contributors to the
by around 6.6% due to new operational measure overall cost increase in the Transition Period and
for regional operators. We expect the cost Franchise payments to the government due to
increase to be around 1.1% during the New emergency plans in the New Normal scenario.
Normal scenario.
Figure 5.2 Estimated cost impact for regional operators
Transition Period New Normal scenario
108% 0.2% 108%
0.8%
0.8% 0.1% 0.2%
106% 0.8% 107% 106%
1.2% 0.2%
104% 104%
1.2%
102% 1.2% 0.1% 0.1%
102% 0.2% 0.2%
0.2% 0.3% 0.1%
100% 100% 101%
100% 100%
98%
98%
96%
96%
Routine cleaning and preventive
Routine cleaning and preventive
Temperature screening-Other
Other social distancing measures-
New Normal scenario
PPE and sanitary materials-Other
Base Costs
Protective / buffer areas-Other
Staff training-Staff costs
Temperature screening-Staff
customers and general public-
Emergency plans-Other
External communication to
Routine cleaning and preventive
Routine cleaning and preventive
Temperature screening-Other
Emergency plans-Franchise
New Normal scenario
Base Costs
Staff training-Staff costs
customers and general public-
Emergency plans-Other
payments to government
External communication to
disinfection-Staff costs
disinfection-Staff costs
disinfection-Other
disinfection-Other
costs
Other
Other
Other
Cost impact for long distance operators › While material costs allocated to Other due
to Other Social Distancing Measures are the
› We expect costs for long-distance operators to largest contributors to the overall cost increase
increase by around 6.5% due to new operational in the Transition Period, in the New Normal
measures during the Transition Period. However, scenario the largest contribution comes from
we expect that the cost increase in the New Franchise payments to the government due to
Normal scenario will be limited to around 1.4%. emergency plans.
Figure 5.3 Estimated cost impact for long-distance operators
Transition Period New Normal scenario
108% 0.2%
0.7% 108%
1.0%
106% 0.7% 107% 106%
0.7%
104% 0.7%
0.8% 0.2% 104%
0.8%
102% 0.8% 0.2% 0.2% 0.1% 0.1%
102% 0.5%
0.1% 0.2%
100% 101%
100%
100%
100%
98%
98%
96%
96%
Routine cleaning and preventive
Routine cleaning and preventive
Temperature screening-Other
Other social distancing measures-
New Normal scenario
Temperature screening-Staff costs
PPE and sanitary materials-Other
Base Costs
Protective / buffer areas-Other
Staff training-Staff costs
customers and general public-
Emergency plans-Other
Routine cleaning and preventive
Routine cleaning and preventive
Temperature screening-Other
Emergency plans-Franchise
New Normal scenario
Base Costs
Staff training-Staff costs
customers and general public-
Emergency plans-Other
External communication to
payments to government
External communication to
disinfection-Staff costs
disinfection-Staff costs
disinfection-Other
disinfection-Other
Other
Other
Other
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K TRACK5.3 New habits and their impact on demand
Passengers are likely to adopt new transport However, our analysis does not intend to assess
habits if they modify some of their working, any scenarios considering different paths for
shopping and leisure habits. We consider that those factors. We assume that the split per
such changes are likely to occur, at least to some trip purpose will remain intact irrespective of
extent, as we have been forced adapt to new the economic conditions prevalent after the
habits and have had the time to assess their Transition Period.
benefits and transform them into a habit.
We estimate that the habits established in
Understanding the impact of COVID-19 on the New Normal scenario would reduce rail
passengers’ habits and travel patterns is essential passenger demand by 8% for long distance
to assess future demand in the rail sector and operators, 11% for regional ones and 13%
potential shifts within the transport industry. in commuting markets, where the potential
The analysis we present in this section aims to new working environment would have the
evaluate the impact on rail demand from adopting most impact.
new habits. We have assessed how such new
habits will affect the key drivers of transport 5.3.1 New habits that will influence
demand and estimate their overall impact on the travel behaviour
main rail passenger markets. Many new habits adopted during the lockdown
and Transition Period are likely to remain in the
We know that other economic drivers will
New Normal scenario. We have considered the
determine the development of transport demand
ones that have the potential to impact travel
in the coming months and years. Particularly, we
demand and assess how likely they are to
deem the following three key factors will have a
continue in the future.
significant impact on the evolution of passengers’
demand:
› Global economic activity and recovery;
› Government policies and support to the
transport sector; and
› Future availability of healthcare therapies
and vaccine.
31Assessment of current and future customers habits and likeliness to evolve
during the Transition Period and New Normal scenario
Social-distancing Lockdown Transition New Rationale
response Period Normal
scenario
› Fully in place during lockdown
(when applicable)
Remote working from › Maintained during the Transition Period for
home majority of week’s time
› Smart working will remain as long as it is
beneficial for both employers and employees
› In place during lockdown
Switch from face-to- › Kept during the Transition Period
face meetings to video when applicable
conferencing › Potential general reduction of long-haul
flights and train travels to reduce costs
› Not applicable during lockdown
› Potential implementation during the
Transition Period when some business will
Shift of workplace gradually reopen
working hours
› Likely to implement flexible working routines
on a larger scale than before lockdown in the
New Normal scenario
› Not applicable during lockdown
› Potential implementation during the
Switch to more Transition Period when some business will
individual modes of gradually reopen
travel (i.e. bikes and
cars) › Likely to implement flexible working routines
on a larger scale than before lockdown in the
New Normal scenario
Legend
Very Likely to be implemented / retained
Fairly likely to be implemented / retained
Partially implemented with potential relaxation / dismissal
Fairly Unlikely to be implemented / retained
Very Unlikely to be implemented / retained
3 22 / // / G EGT ET ITN TG I BNAGC KB OANC TKR AOCNK
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