Carrying out dynamic changes to secure future position

2008 was a year full of dynamic changes for Czech Railways, and now it is facing yet another period during which the speed and depth of changes will continue with unchanged momentum. Czech Railways can therefore be described, without exaggeration, as a company in the intermediate time of its transformation.

In 2008 new management joined the company. It was the first year of operation of the separate passenger and cargo transport corporations, and the years of further separation of infrastructure and transportation. The Czech Railways has transferred the functions of operator and infrastructure maintenance of the railway tracks to Správa železniční dopravní cesty (Railway Track Management), thus making yet another logical step towards its profiling as a ‘pure’ carrier operating in the ever more liberalised market.

In 2009, Czech Railways is focused in detail on the transformation of its passenger transport functions. The company management has presented an ambitious transformation plan covering the entire section of passenger transport, with the goal of completing the transformation of the Czech Railways into a modern firm capable of competing on the local and the European liberalised markets.

The entire transformation plan involving passenger transport has been based on five main pillars:

• Higher revenue resulting from a more consistent customer focus
• Higher revenue and financing of transport as a public service venture
• Higher revenue from commercial activities
• Higher operational efficiency
• Building up of a company characterised by modern corporate governance and human resources management

It was within those five areas that a total of 17 priority projects were launched aimed at achieving total financial effects in excess of €180 million. The key initiatives shall cover, for example, the formation of a long-term performance strategy, the introduction of differentiated prices, and/or a comprehensive plan covering commercial transport ventures. It further incorporates customer focus and efficient communication and marketing activities in support of Czech Railways’ business.

Some of the projects were actually launched as early as 2008. The company adopted measures aimed at the reduction of its overhead costs by as much as 20%. It introduced a centralised system of certain key activities, such as procurement, legal services and marketing – not only in the area of passenger transport but also within the subsidiaries of the company. At the same time, the company commenced a process shifting to the application of the international accounting standards, with the goal of achieving the utmost transparency of its accounting books, and thus meeting the requirements for the allocation of an international rating in 2011.

One of the key areas closely associated with the success of the transformation project concerns human resources. Czech Railways has been ever more successful in recruiting young successful professionals previously employed by regular commercial companies, and often belonging to international brands. The management team of Czech Railways – not only at the top tier but also at the middle management level, has recently been supported by a number of professionals previously working either for supranational financial corporations, prestigious IT companies or air carriers. Czech Railways thus manages to capitalise upon its image as a changing company possessing a number of career opportunities. This aspect, however, has not been limited to the level of the company top managers but also for school-leavers and graduates. A newly launched programme of scholarships for students and undergraduates aimed at recruiting future employees for Czech Railways has found a tremendous response among students of secondary vocational schools.

Following stage one of the transformation of the Czech Railways, after the separation of cargo transport from the passenger section last year, transformation of passenger transport takes place by way of the final metamorphosis of Czech Railways into a modern European carrier.

Modernisation drives continuing along transformation

Rolling stock

Similarly to previous years, this year has also seen substantial modernisation efforts regarding the Czech Railways’ rolling stock – designated mainly for regional services. Czech Railways commissioned new and modernised vehicle combinations and carriages worth approximately one billion Czech crowns during the first quarter of the year. They mainly concerned nine regional motor trains, known as ‘Regionova’, and three suburban double-decker trains named ‘CityElefant’. These trains are barrier-free and offer comfortable travel particularly for disabled wheel-chair users and passengers with prams and bicycles. The modern suburban CityElefant trains, with air conditioning, offer comfort comparable to that ensured in EuroCity and InterCity trains.

In the first quarter of 2009, deliveries of vehicles continue pursuant to contracts concluded in the previous years and covering as many as 100 Regionova motor regional trains and 30 CityElefant modern double-decker suburban units.

Mr. Rostislav Novák, Director of Rolling Stock for Czech Railways comments: “In the course of the first three months of the year, we received eight two-carriage and one three-carriage Regionova trains from the company Pars Nova of Šumperk, and a total of three CityElefant units from Škoda Vagónka in Ostrava. Each of them comprises three vehicles.”

The trains will provide more comfortable travel over practically all of the Czech Republic. Mr. Novák continues: “The Regionovas were deployed at the operating centres in the regions in the western, eastern and central parts of the Czech Republic. From there, they can serve the local services extending practically from the Slovak border on the East as far as the Western frontiers. The CityElefant electric trains are designated for suburban transport around the major agglomerations and all of them have been delivered to Prague where they would complement the existing ‘Esko’ stock operated along the suburban services. On a daily basis they carry approximately one fifth of all passengers and even the 40 year old ‘pantograph’ units still operate along those services.”

Mr. Novák adds: “All new and modernised vehicles offer passengers higher comfort than the existing trains. Against the old motor trains, the Regionovas feature new upholstered seats with high backs and only four seats in one row. The old carriages had as many as five seats in one row. Moreover, the Regionovas have been designed in part as low-floor carriages so that they can offer comfortable travel also to wheel-chair users, mothers with prams and people with bicycles.”

Also, a high level of comfort is offered by the CityElefant suburban units, which can compare to higher-quality long-distance trains. Mr. Novák adds: “Here, too, upholstered seats are a matter of course, complete with head rests and places reserved for wheel-chair users, including toilets; moreover, those trains feature air conditioning and they also include seats in first class compartments equipped with 230 V sockets for portable electronic devices.”

Beside Regionovas and CityElefants, other modernised carriages were also supplied. “They were two driving vehicles code-named 954.2 and one driven carriage 054.2 for motor trains operated along the main non-electrified railroad tracks. They mainly operate on express and rapid services and some slow passenger services”, says Mr. Novák.

At the end of March, a delivery was also completed for 40 modernised carriages for the EuroCity trains; they have been fitted with air conditioning, a closed system of toilets, and new upholstered seats.

Czech Railways is to receive new and modernised trains worth CZK 4.5 billion this year. Although this is one of the largest deliveries in the history of Czech Railways, the number is still fairly low compared to the requirements for new trains. It would be necessary to invest at least CZK 8 billion a year into the modernisation and purchase of new trains in order to prevent the rolling stock becoming obsolete.

Beside the planned deliveries based on previously concluded contracts, Czech Railways intends to modernise its rolling stock by introducing vehicles, a tender for which is soon to be called. This chiefly involves the procurement of 100 carriages for long-distance trains in the EC and IC categories. They should contain modernised carriages, which have currently been made use of by some of the European carriers. If the tender is successful, 30 of such carriers should be deployed as early as the new timetable – December 2009. Yet another topical event is represented by another tender for the delivery of 10 low-floor motor units. Czech Railways plans to deploy them on rapid train services outside the main corridor tracks and, at the same time, along some suburban services.

Incorporation uniform colours and attractive corporate design

Czech Railways, through its efforts for changed customer orientation and in connection with the liberalisation of the market, has started to unify the colours applied to its trains, making use of a new corporate colour style.

The new Czech Railways trains can be identified by their combination of dark blue, light blue and light grey colours. Commencing in mid-2009, Czech Railways will exclusively apply this colour pattern on all repaired carriages. At the same time, it has been conducting talks with the manufacturers of new carriages and has requested to have their trains painted using the new colour pattern as soon as possible.

Czech Railways thus prepares itself for entry as competition into the railway market. It will be clear at first glance to passengers that they are approached by a train belonging to Czech Railways. The new colour pattern has been designed by the leading Czech design studio Najbrt. Both concepts are based on a similar combination of colours. Czech Railways has been in touch with Najbrt Studio since 2006; then, the studio won a tender for the design of the Czech Railways logo.

No extraordinary capital investments

Once a carriage or locomotive is sent to a shop to be repaired, the repair will also comprise of a new colour coat and it will leave the shop bearing the new colours. By the end of this year alone, at least 30 carriages and 10 locomotives are to appear on the Czech railways in the blue colour.

Mr. Petr Žaluda, CEO of Czech Railways explains: “We are not going to repaint now all our trains one after another, that would not be economical. All modern firms take care of their clear corporate image. Look at the airlines, branches of banks, petrol stations or restaurant chains. Most of them can be recognised at the first glance and at a distance. Trains belonging to Czech Railways must also be clearly identifiable.” Mr. Žaluda adds: “Liberalisation of the railways market is merciless; a number of carriers will appear along the Czech railway tracks and Czech Railways will be merely one of them. What I want is that our customers can clearly recognise and know our trains.”

Why was the blue-blue-grey combination chosen?

“The colour patterns applied to the locomotives and carriages for Czech Railways are quite unique among the European competitors”, explains Mr. Aleš Najbrt, Art Director and Graphic Designer at Najbrt Studio. “The blue derives from the railways history and at the same time stresses stability, certainty and credibility. It may seem to be a conservative style at first sight but it is timeless in the long perspective and I am convinced that it will remain a clear symbol of credibility and certainty even after 20 or 30 years.”

Colours applied to individual carriages

Carriages will bear different colour patterns according to their functions in a train. Mr. Antonín Blažek, Deputy CEO in charge passenger transport says: “It is important that passengers know at the first glance what is the crew carriage where bicycles are carried, first class or wagon de lit or couchette car. Each will bear a different colour pattern so people can easily distinguish them. Also, the colour distinction of the doors will assist people with impaired vision.”

Czech Railways’ corporate style

Czech Railways gradually works out all elements of its corporate style. The past two years have experienced unifications in the following areas:

• Colours
• Special font – ‘ČD Fedra’
• Colour patterns applied to the check-in and navigation systems at railway stations
• Timetable
• Internet sites
• Promotion packs

Czech Railways has long co-operated with design studio Najbrt in inventing the visual style of Czech Railways. It concerns, for example, the new system applied to the identification of booking offices and navigation at railway stations, for which Studio Najbrt was awarded the Czech Grand Design 2007 prize.

Marketing and Communication Director, Mr Miroslav Šebeňa comments: “We follow suit with other companies of significance for whom a uniform visual image represents the basis for their successful communication with customers. This is new as against the past, since one of the best known brands in the Czech Republic, Czech Railways, can newly rely on the concept of uniform visual identification. Together with offering a better quality, this can contribute to its comprehension by the customers.”

As this article has shown, Czech Railways and its passenger transport is looking ahead to dynamic times full of changes and new approaches. These, however, are all necessary preconditions for Czech Railways to be able to maintain its position as one of the most important carriers within the countries of the European Union in the future. We are determined to the utmost extent to achieve this goal.