In the last days, I saw many comments on #ITALO and the sale to the Infrastructure Fund #GIP.
I think that it is important to understand the importance of this acquisition.
#Italo grew a lot in the last years and the EBITDA margin is higher and higher: in 2017 it was 34,3 per cent of the revenue.
The number of passengers increased from 6.56 million in 2014 to 12.8 million in 2017 with the same numbers of train (25 AGV).
The increase of the productivity decreased the cost per available seat km to a lower level of many low cost, even if #Italo is a not a low cost carrier thanks to the wide offer of services (Italo Lounge, Club, Wifi, On board portal).
The increase of the productivity gave an higher frequency of the service and this an important point to understand: in the HSR business the frequency is a key driver of the success to have also an higher Yield (Rev/PaxKm).
Why has an infrastructure fund bought a railway undertaking that it has not a infrastructure?
I had meetings in the last months with the most important investment bank that asked me some counselling:
– the EBITDA margin is similar to the Utilities
– The regulation will be certain for the next 4 years (access charge)
– The European market is opening soon
– The increase of the number of trains from 25 to 42 in the next 20 months will permits to increase frequency and to take new markets (Turin-Milan-Venice).
– It will be not easy to a third Railway operator to enter in the italian market due to the importance of the frequency of the service.
Last points the I underlined in my article for an italian newspaper:
– the crazyness of one founder of the company, Eng. Sciarrone that he was the first CEO of the company (2006-2013) and he created the company from zero.
– The capacity of the CEO, Mr. Cattaneo in making an impressive turnaround of the business.
– The shareholders that believe in this “crazy adventure”
– The high knowledge of the management of the company, that they were able to improve day by day the efficiency of the company.
