Five Major Challenges Awaiting Deutsche Bahn's New CEO

Deep News
Aug 15, 2025

Following the dismissal of Deutsche Bahn CEO Richard Lutz, the selection of a new chief executive remains undetermined. However, whoever ultimately assumes the role will inherit a comprehensive set of challenging issues: aging infrastructure, strained finances, and dissatisfied passengers.

**01 Punctuality and Customer Satisfaction**

Train delays have become virtually the "norm" for Deutsche Bahn, with long-distance trains achieving punctuality rates of less than two-thirds. Issues such as service cancellations, overcrowding, and infrequent departures occur regularly. Federal Transport Minister Patrick Schnieder plans to unveil a new railway strategy on September 22 - the "Railway Agenda for Passenger Satisfaction" - demanding that Deutsche Bahn achieve "punctuality, safety, and cleanliness" while becoming more efficient and competitive in management. The new CEO will likely be confirmed before this date and make their debut alongside the strategy announcement.

**02 Infrastructure Renovation**

Deutsche Bahn identifies aging and heavily utilized tracks as the primary cause of train delays, planning "closed-loop" major overhauls of approximately 40 key routes by 2036, rather than conducting maintenance while operations continue. Last year, the Riedbahn line from Frankfurt to Mannheim was the first to implement this approach, followed this year by the Hamburg to Berlin route. While this approach will cause long-term inconvenience for passengers, the industry broadly supports this solution. The new CEO will need to continuously secure substantial funding over the coming years to complete these renovations.

**03 Political Support and Funding Gaps**

Germany's railway infrastructure has been neglected for extended periods, with accumulated investment deficits reaching hundreds of billions of euros. Although the government has recently increased funding, Lutz had already warned that these funds remain insufficient to achieve railway modernization. Current funding primarily focuses on renovating the existing network, lacking support for new construction and expansion projects that are crucial for implementing the "Deutschland-Takt" (Germany Timetable).

**04 Operational Difficulties and Business Reform**

Deutsche Bahn has been operating at a loss for multiple years. The reform plan launched by Lutz in 2024 encompasses not only infrastructure and operations but also the elimination of thousands of positions to improve profitability. The freight subsidiary DB Cargo faces the greatest pressure - according to EU regulations, the company must return to profitability next year. However, the single-car transport (Einzelwagenverkehr) business has been consistently unprofitable while remaining crucial for steel, chemical, and construction materials industries, as well as climate objectives. Should operations cease, road freight pressure would increase dramatically.

**05 Upcoming Labor Negotiations**

The labor agreement with the train drivers' union (GDL) expires at year-end, making new negotiations inevitable. Former union leader Claus Weselsky was known for his hardline approach, frequently organizing strikes that caused large-scale service disruptions. Whether new chairman Mario Reiß will continue this approach remains unknown. If negotiations are prolonged and trigger major strikes, the new CEO could face the embarrassing situation of nationwide railway shutdowns immediately upon taking office.

In summary, Deutsche Bahn's new leader must not only repair tracks, secure funding, and improve efficiency, but also win the trust of politicians, passengers, and employees - a challenge destined to be a prolonged battle.

Disclaimer: Investing carries risk. This is not financial advice. The above content should not be regarded as an offer, recommendation, or solicitation on acquiring or disposing of any financial products, any associated discussions, comments, or posts by author or other users should not be considered as such either. It is solely for general information purpose only, which does not consider your own investment objectives, financial situations or needs. TTM assumes no responsibility or warranty for the accuracy and completeness of the information, investors should do their own research and may seek professional advice before investing.

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