Boosting passenger preference for rail

A new report sheds light on passenger rail’s recovery from the COVID-19 pandemic, and how rail could position itself as one of the preferred choices of transportation for the future.

COVID-19 had a profound impact on people and industries across the world, with lasting changes to the way many people work and travel. Passenger rail was significantly affected, as at the onset of the pandemic operators had to contend with a sudden, steep drop in ridership. A new report, Boosting passenger preference for rail, by the International Union of Railways (UIC) in a partnership with McKinsey & Company, found that depending on the region, passenger numbers declined by between 40 and 100 percent, with a global average of around 70 percent. As the pandemic-related restrictions were lifted, operators put measures in place to restore rail services and adjust their offerings to suit customer’s changing needs, which aided recovery—although passenger rail traffic had not fully recovered at the beginning of 2022 when the research for the report took place, particularly in North America and Western Europe.

Even as the rail industry works to overcome the effects of the pandemic, several trends indicate that operators could not only restore passenger numbers to pre-COVID-19 levels, but increase rail’s modal share. Doing so could meet consumer expectations and help governments and countries around the world to achieve sustainability goals. For instance, consumers have become more environmentally conscious and rail offers a more sustainable option than traveling by car or plane. Over the next ten years, given new mobility offerings, car modal share for short to medium distances is expected to decrease by between 20 and 70 percent, with variations across regions—freeing up modal share that could be captured by rail. 1

Furthermore, several regions are focusing on modernizing rail infrastructure and decarbonizing transport. The European Green Deal, a wide-ranging stimulus package focused on sustainability, is estimated to include €87.5 billion in investment related to rail infrastructure. 2 Likewise, in the United States, the Infrastructure Investment and Jobs Act (IIJA) allocates $66 billion in funding and grants towards corridor development, rail track modernization, and safety improvement. 3 And in Africa, an integrated high-speed train network is at the heart of the “Agenda 2063” as one of 15 flagship projects. 4

Given these global trends, rail has the strength to position itself as one of the preferred choices of transportation of the future, helping to solve many longstanding challenges in passenger transport: sustainability, speed, and volume. Rail’s strengths include the ability to transport large volumes of people in an efficient manner, at a faster speed than car travel (if high speed or at peak hours when roads are congested), with enhanced travel comfort for leisure and business, and at lower energy consumption and hence lower carbon emissions per passenger.

That said, in many regions of the world, rail faces various challenges that act as barriers to increased ridership, including pricing schemes that are perceived to be expensive, a lack of reliability and punctuality, insufficient density, and a lack of convenience from an end-to-end journey perspective.

Boosting passenger preference for rail examines passenger rail’s current status, the reasons why passengers may or may not choose rail as a transport option, and the shifts in consumer behavior that have affected rail passenger numbers—and will likely continue to do so in the future. It also details the measures that operators have taken to restore rail travel to pre-pandemic levels. The report concludes with a set of concrete levers railway operators can pull to recover passengers lost during the pandemic, attract new passengers, and develop rail to be a viable alternative to road and air transport.

Customer expectations: Price is key

The report finds that price is a core decision criterion for consumers when choosing rail over other means of transport. Other important factors are largely related to overall time of travel—especially regarding frequency, and speed—as well as reliability of service.

Research draws on a representative sample of customers across nine countries in three continents (Europe, Asia and North America) who were asked about their reasons for deciding to travel by rail. The results show that price, safety, reliability, and convenience remain the main drivers for passengers when choosing their mode of transport (exhibit). In all investigated regions except China, people report price as their key criterion for choosing a mode of travel.

Price, safety, and core product offering remain key drivers for choosing mode of transport.
We strive to provide individuals with disabilities equal access to our website. If you would like information about this content we will be happy to work with you. Please email us at: McKinsey_Website_Accessibility@mckinsey.com

Sustainability-related criteria seem to play only a minor role for passengers in their travel selection, though with notable differences across regions—between 3 percent of customers (Japan) and 19 percent (China) indicated that this aspect is one of their top-three decision criteria. When asked about their sustainability behavior, 87 percent of customers expressed an interest in sustainable rail offerings, but only 12 percent would be willing to pay a premium for sustainable products or services.

Long-distance travelers assign less importance to price (26 percent compared to 34 percent for medium and 32 percent for short-distance travel) and are more interested in convenience factors like travel time and the number of changes required on the journey.

Given these customer expectations today, rail operators could focus on their core offerings— including convenience, reliability, and speed, as well as price and safety—to increase passenger numbers and grow rail’s modal share. Railway infrastructure expansions and ongoing investments for maintenance and repair can help to support this.

Three horizons that can boost rail modal share

Rail operators, together with infrastructure managers and policy makers, can consider various measures across the following three horizons to grow passenger preference for rail and establish rail as the means of transportation of the future.

Horizon 1—Restore rail travel to pre-COVID 19 levels

Operators around the world have taken steps to aid demand recovery by re-establishing service availability and reliability, adapting offerings to suit new customer needs, and making these changes known to customers through clear communication. These same levers could be important in their continuing efforts to restore rail travel to pre-pandemic levels.

Operators could ensure that current customer expectations are met or exceeded, especially in terms of reliability and safety, and adjust offerings to meet changed demand and habits caused in particular by the increase in hybrid working. For instance, offerings such as modified train schedules and discounted tickets for off-peak travel could enhance the appeal of rail travel for commuters. Another approach could be to launch new offerings in response to the resurgence of local leisure travel, for instance through discounted fares or special passes for weekend travel, or to popular getaway destinations.

Furthermore, communication through ads and other media channels with customers is critical in creating awareness around existing rail services, and in fostering the desire to travel again. It can also be a key touch point for alleviating passengers’ health-related concerns by showing what hygiene measures are in place.

Horizon 2—Grow passenger rail by improving operations

Operators can build upon their existing networks to attract new passengers and enhance the travel experience. This can be achieved through a number of methods, such as tapping into new passenger segments with new offerings and differentiated pricing, and upgrading and enhancing both the train and station passenger experience. Trains could be re-positioned as multifunctional spaces, going beyond the traditional role of only offering seats to bridge distances. Measures to achieve this could include expanding onboard services such as digital connectivity, or providing luggage concierge, pet transportation, and food-ordering services.

Operators could also focus efforts on improving the end-to-end journey and offer a comprehensive mobility-as-a-service (MaaS) experience, for instance through mobile apps. Several operators are working within their travel ecosystems to provide one single pass so passengers can access multiple means of transport such as cars or e-bikes as well as trains.

Horizon 3—Grow passenger rail by structural measures

In the long term, operators could ramp up investment in infrastructure and service excellence. Doing so will likely require investment in high-density, high-speed and high-frequency networks. This involves increasing capacity and level of service through capital investments that include rolling stock, infrastructure, and digital technologies.

Around the world, operators are upgrading their fleets. Rolling stock investments have been projected to increase across all geographies at a rate of 6 percent a year between 2019 and 2024. 5 New rolling stock increases capacity, creates higher customer satisfaction, improves sustainability, and offers the opportunity to modernize interiors, add connectivity, and improve services.

Density, speed, and frequency are three factors that position train travel as an efficient and convenient passenger service—and the case for high density, high speed, and high frequency has already been made numerous times around the world. In France, Germany, Italy, Spain, and Japan, the introduction of high-speed rail massively increased rail modal share, replacing cars for shorter distances and planes for longer distances. High-speed connections are a key success factor as journey time critically impacts rail modal share when compared to air travel.

Furthermore, as urbanization leads to increased populations within cities and city agglomerations, rail is an efficient means to relieve traffic congestion from individual mobility in high density regions, and aid sustainability. Rail generates four to six times less CO2 emissions than traveling by internal combustion engine cars, and even generates less than electric vehicles. When evaluated against air transportation, rail is a more sustainable option, producing about 10 to 15 times less CO2 per passenger. 6

All stakeholders may need to collaborate in finding ways to reap the benefits that rail can offer—for customers, operators, and nations. For instance, operators and policy makers could develop an integrated perspective on the business model for rail and its role in alleviating traffic congestion, aiding sustainability, and contributing to economic growth.


Opportunities exist for rail operators to restore passenger rail to pre-COVID-19 levels and gain modal share. Rail operators that focus on restoring and growing the passenger base, providing better services, and investing in infrastructure have potential to succeed. Such efforts are becoming necessary in the face of climate change, and expanding populations that need access to safe, reliable, and affordable transport.

Explore a career with us

Related Articles