Germany’s public transportation network is facing a critical juncture, as rising costs and lagging ridership threaten service levels across the country. Despite the success of the nationwide Deutschlandticket in maintaining passenger volume, a significant financial gap remains, leaving local and national rail operators bracing for potential cuts. Industry leaders warn that without a ample influx of funding and a modernized financial framework,commuters could see reduced service as early as this year.
Reduced bus and train service, and complete closures on key routes, are looming as public transportation in Germany faces a growing financial crisis. The head of the Association of German Transport Companies is warning passengers will feel the impact of funding shortfalls.
Germany’s public transportation system is bracing for potential service cuts as financial pressures mount, despite a relatively successful rollout of a nationwide ticket. The challenges come after a year of transition for the country’s rail network, marked by a new government and a new CEO at the national rail company. The Association of German Transport Companies (VDV) recently assessed the situation, with President Ingo Wortmann stating, “We have achieved some things, but we are by no means satisfied.”
Passenger numbers on local transport have yet to fully recover from the drop experienced during the COVID-19 pandemic. While the total number of passenger journeys increased from 9.78 billion in the previous year to 9.86 billion in 2025, this remains below pre-crisis levels of 10.43 billion in 2019.
The introduction of the Deutschlandticket, a nationwide monthly pass, has largely avoided the worst-case scenarios. Despite a price increase to 63 euros at the beginning of the year, there hasn’t been a significant drop in customers. By the end of 2025, the number of subscriptions reached 14.6 million – an increase of nearly one million within a year. The cancellation rate at the start of 2026 was 5.75 percent, according to industry data, a figure that is within the normal range and lower than the previous year.
However, the VDV president isn’t entirely pleased with the ticket, which is scheduled to be linked to a cost index starting in 2027. “The Deutschlandticket has brought back riders, but not new customers,” Wortmann said. A low price alone isn’t enough; the service must also be suitable and, above all, reliable.
The financial situation for public transport companies remains tight. While electricity and diesel prices have decreased slightly compared to 2024, personnel costs continue to rise.
Total expenses for public transportation in Germany currently amount to around 39 billion euros per year. Transport companies generate approximately 13 billion euros through ticket sales and other revenue, with public funds contributing around 26 billion euros annually. This imbalance is growing, and transport companies are becoming increasingly dependent on public funding, which fluctuates with the economic situation.
Service Cuts Possible This Year
To ensure the long-term viability of public transportation, planning security and a new funding model are needed. Otherwise, the consequences are predictable. Wortmann openly discussed potential service reductions, with connections being cut and fewer buses and trains offered as early as this year. At the latest, these changes will take effect with the December timetable change if “nothing changes substantially.”
A modernization pact is central to this effort. Announced in the previous legislative period, it has yet to be implemented, despite being enshrined in the current coalition agreement. However, “the Federal Ministry of Finance and the Federal Ministry of Transport have so far rejected the implementation of the modernization pact, citing a lack of additional funds, as they fear financial demands from the states and municipalities,” according to the VDV.
The goal was to establish a new legal basis for public transport funding, absorb rising costs, create scope for new services, and adjust the indexation mechanism. The Federal Municipal Transport Finance Act (GVFG) is also to be simplified, streamlined, and financially increased.
The association sees this as a short-term lever. Since 2025, two billion euros have been available annually through the GVFG, with funding scheduled to rise to 2.11 billion by 2028 through indexation. The VDV considers this insufficient and is calling for higher indexation linked to a construction cost index.
The situation in rail freight transport is even more dramatic. Transport performance has been declining for years: from around 150 billion tonne-kilometers in 2022 to 133.9 billion in 2025. The rail freight sector is facing intense competition from trucks, a weak economy, and rising energy and labor costs.
Adding to the challenges is a network operating at its limits. Approximately 28,000 construction sites are expected on German railways this year, around 2,000 more than in 2025. More construction sites mean more detours, longer travel times, and increased costs for transport companies. The diversion routes are also prone to disruptions and would also need to be renovated. According to the VDV, ideally, the diversion routes should be repaired first, followed by the main lines, but there is no time for that now, and the important corridors must be renovated first.
However, the concept of complete closures is being questioned by the industry. The most important rail corridors will be upgraded in the coming years, with partial closures lasting for months. The association “Die Güterbahnen” (The Freight Railways) also warns of a tipping point. Managing Director Peter Westenberger says: “If trains can no longer run or transport becomes too expensive due to detours, customers will switch to the road.” Together with already closed sections, around 1144 kilometers of heavily used tracks will be completely taken out of service in 2026, according to the association. The industry is therefore calling for complete closures not to become the standard, but to be reviewed on a case-by-case basis.
Deutsche Bahn remains convinced of the concept of complete closures. Further corridor renovations will begin in early February on the important and heavily used Hagen–Wuppertal–Cologne and Nuremberg–Regensburg lines, followed in the summer by Hamburg–Hannover and Koblenz–Wiesbaden. Rail passengers should expect canceled connections and longer travel times once again.
This article was created for the economic competence center of WELT and “Business Insider Germany”.
Klemens Handke is an economics editor. He writes about transport policy and Deutsche Bahn.
