International activities

FPC operates direct and transit passenger services to the CIS and Baltic states and 16 European and Asian countries along 21 international routes, including Austria, Bulgaria, Hungary, Germany, Italy, China, North Korea, Mongolia, Monaco, Poland, Slovakia, Finland, France, the Czech Republic, Montenegro and Serbia.

International Activities

International passenger rail services are in many ways supported by active participation of the Company’s management in international railway industry associations such as OSJD, UIC (currently chaired by RZD President Oleg Belozyorov), CRT and CIT, as well as bilateral and multilateral partnerships between FPC and railway carriers and administrations.

The international passenger traffic (down 33% year-on-year in 2015) was adversely affected by the economic crisis, which continued into 2015 with a further depreciation of the national currency against the US dollar, Euro and Swiss franc, a major settlement currency between railway administrations.

Lower demand for long-distance rail travel forced FPC’s management to introduce austerity measures, including shedding poorly performing assets and optimising both the domestic and international route networks.

Despite an unfavourable macroeconomic situation, in 2015, FPC maintained its leadership position in the international railway industry by developing partnerships in technology, expanding the application of dynamic pricing and e-ticketing, and taking active part in the efforts to improve the regulatory framework for international passenger rail services.

Status in railway organisations focused on international rail services

Organisation FPC’s status Date when the status was assigned
the Organization for Cooperation between Railways (OSJD) Associate member Observer April 2011
June 2013
International Rail Transport Committee (CIT) Full member 1 May 2012
International Union of Railways (UIC) International carrier code assigned 2011
UIC European / Asian Regional Assembly Associate member July 2012

Cross-Border Partnerships in Technology

As part of the project to launch high-speed train services between Russia and Central Europe by putting on new rolling stock by Spain’s Patentes Talgo S.L., FPC organised a series of international events.

They included an extended meeting between FPC, Belarusian Railway, PKP Intercity, PKP Polskie Linie Kolejowe, Patentes Talgo S.L., and Polish and Belarusian border guards and customs services.

The meeting was focused on the progress in the construction of a bogie exchange station in Brest, certification tests of Patentes Talgo rolling stock and acceptance tests of the bogie exchange station, as well as on the interaction among local border guards, customs authorities and other regulatory bodies.

Additionally, FPC organised a presentation of Patentes Talgo rolling stock for Belarusian Railway, PKP Polskie Linie Kolejowe and regulatory authorities of Belarus and Poland, and arranged for field tests in Poland to identify the specifics of the rolling stock operation at underground railway stations.

Negotiations were held with Patentes Talgo S.L. to discuss financial and economic aspects of further relations between the two companies. In particular, the two sides revised the price and terms of the contract for Patentes Talgo rolling stock maintenance and discussed a delay in delivery of the trains to Russia and their certification. The parties agreed to reduce the contract price.

Strizh-branded trains manufactured by Patentes Talgo S.L. have been running on the domestic route between Moscow and Nizhny Novgorod since 1 June 2015, having replaced Sapsan trains on this service link. Passengers have already appreciated new Strizh trains for their quality and comfort.

On 2 June 2015, during an official visit of the Slovak Prime Minister Robert Fico to Russia, FPC and the Slovak-Russian Business Council signed a memorandum of cooperation in the rolling stock sales and upgrades.

The memorandum expresses mutual interest in the modernisation of FPC’s rolling stock by Slovak companies (dining carriages and conversion of RIC carriages into staff carriages), purchase of WLABmee carriages (built in 1994) by the Slovak side from FPC and lease of dining carriages by FPC from third parties.

The parties signed a purchase and sale contract for 40 WLABmee carriages and held extensive talks to discuss the implementation of other articles of the memorandum.

The conversion of new RIC carriages into staff carriages was discussed at a series of meetings with Siemens, a manufacturer of this rolling stock.

Окончательное решение АО «ФПК» будет принято после анализа технико-экономических обоснований модернизации, представленных словацкой и австрийской сторонами.

FPC will make its final decision after the consideration of feasibility studies provided by the Slovak and Austrian sides.

In an effort to develop ticketing sales, FPC, OSJD and UIC organised a joint seminar on advanced ticketing technologies in Saint Petersburg on 25–26 May 2015. The international seminar was attended by representatives of railway authorities from UIC and OSJD member states, including Austria, Azerbaijan, Belarus, Kazakhstan, Russia, Finland, France, the Czech Republic, Mongolia, Poland and Hungary. With more than 150 participants, the event featured two plenary sessions dedicated to innovative mobility and development of e-commerce, and presentations themed Increasing Sales with Hermes Technologies and UIC Standards, Booking Assistance System for Persons with Reduced Mobility (PRM), etc.

Improvement of the Pricing Policy and Optimisation of International Rail Services

At a time of economic crisis and reduced consumer demand, the pricing policy takes on a new significance. Competitive prices and top-quality transport services speak for the Company’s maturity and the management’s ability to make effective management decisions.

In 2015, FPC stayed in close contact with railway authorities and carriers from the CIS and Baltic states to discuss tariffs, discounts and surcharges.

As a result, passengers were offered discounts and special prices for certain trains running to the CIS and Baltic countries. In particular, discounts were offered depending on the booking date (Russia — Belarus / Moldova / Lithuania / Latvia / Estonia / Kazakhstan / Uzbekistan / Kyrgyzstan / Tajikistan), on side bunks in third-class carriages (Russia — Belarus / Moldova), round-trip tickets (Russia — Belarus), and when purchasing tickets for the entire compartment in first-class and compartment carriages (Russia — Latvia). Discounts ranged from 10% to 58% depending on the route and applicable tariff plan.

Another set of discounts was offered on all category tickets sold at global prices for international trains (No. 17/18 Moscow — Nice, No. 23/24 Moscow — Paris, No. 21/22 Moscow — Prague, and direct carriages Moscow — Vienna, Moscow — Cheb, Saint Petersburg — Vienna and Saint Petersburg — Prague). These discounts were offered on upper bunks depending on booking dates, passenger age (children, young and senior people), to passenger groups (more than two or more than six passengers), to newly wedded couples and on the passenger’s birthday. Discounts ranged from 10% to 50%.

Significant progress has been achieved in the reporting year towards a new model of business with foreign partners running rail services to the Russian Federation at the Standard International Passenger Tariff. The new model assumes that settlements between railway administrations are based on contracts rather on the ticket component of the fare. Contract-based settlements mean that the party interested in running a train bears all the expenses related to its route, regardless of revenue from ticket sales. This approach secures railway carriers against losses if they are not originators of loss-making trains.

The transition to contract-based settlements for foreign trains running to Russia is planned to begin as early as in 2016, with the support of the Russian Ministry of Transport.

In the reporting year, FPC continued to improve the international route network in cooperation with its foreign partners.

In 2015, the Company resumed services to certain Eastern European countries by providing direct carriages on the routes from Moscow to Budapest, Sofia, Varna, Burgas and Bar in accordance with the 2015/2016 schedule.

Promotion of FPC Products on International Markets

FPC was active in the Train to Paris campaign coordinated by UIC under the auspices of the United Nations in the run-up to the 21st Conference of Parties to the UN Framework Convention on Climate Change held in Paris on 30 November — 11 December 2015.

The key point of the campaign was to organise railway services between Paris as a conference venue and major European capital cities (Berlin, Amsterdam, Rome, Lisbon, etc.) in order to raise public awareness of the climate change and promote rail as the most environmentally friendly mode of transport.

As a campaigner, FPC organised railway transportation of conference participants along the route Beijing — Ulaanbaatar — Irkutsk — Moscow — Paris. There were representatives of Chinese, Mongolian and Russian railways and UIC on the train.

The campaign involved representatives of European governments, public and international organisations, UIC Director General Jean-Pierre Loubinoux, Guillaume Pepy, President of Société Nationale des Chemins de Fer Français (SNCF), Dr. Ruediger Grube, Chairman of the Board of Deutsche Bahn AG, FPC CEO Mikhail Akulov, and other high-profile officials.

Improvement of the Regulatory Framework for Passenger, Baggage and Unaccompanied Baggage Transportation on International Railway Routes

FPC is committed to improving the on-board experience by reducing transit time and optimising customs and border control procedures on international routes.

FPC is active in drafting and promoting a new convention that will facilitate cross-border railway transportation of passengers and their luggage. If adopted by the European Union, the convention will provide a legal framework for more efficient cooperation between railway carriers and border guards and customs services. It will allow for customs and border control procedures on a moving train, thus drastically reducing journey times on international routes.

The new convention is drafted under the auspices of the Inland Transport Committee of the UN Economic Commission For Europe (UNECE ITC) and supported by the Organisation for Cooperation of Railways (OSJD).

On 23–25 November 2015, the UNECE ITC Working Party on Rail Transport held its 69th session in Geneva, where the Russian Delegation and OSJD presented a draft convention and requested the Working Party to approve the document and proceed towards its adoption.

Expansion of Bilateral Cooperation

In 2015, FPC signed two agreements on the cooperation in passenger and baggage transportation on international routes with MÁV-START Zrt. (on 24 June) and Î.S. Calea Ferată din Moldova (on 9 December).

Expansion of the ticket sales network remains an important area of bilateral cooperation. In March 2015, FPC and Eurail Group (Netherlands) signed a memorandum of cooperation: tourists are offered Rail Pass cards with discounts from 30 railway companies, hotels, museums and places of interest in Europe.

On 15–16 June, Vienna hosted the 17th Symposium themed “Europe Goes Digital!”, where FPC and Roland Berger Strategy Consultants signed a strategic agreement to develop an innovative mobility programme.

In 2015, FPC signed contracts with SNCF Mobilité, DB Vertrieb GmbH and MÁV-START Zrt. for the sale of international railway services via each party’s channels.