Delays, Construction and Penalties Push DB Towards €2.3bn Loss

First insider reports about Deutsche Bahn’s 2025 financial results have entered the German public debate, and the outlook is far from encouraging. The state railway group is expected to report a loss of around €2.3 billion, with the long-distance division DB Fernverkehr emerging as the main source of the deficit.

Initial insider reports about the results of the German national railway operator Deutsche Bahn for 2025 have appeared in the German public debate. The outlook is not encouraging: the Deutsche Bahn holding expects a decline in revenue and will likely record a loss of around €2.3 billion.

Surprisingly, the largest share of this loss is linked to the long-distance division DB Fernverkehr. Penalties for failing to meet the schedules of ICE and IC trains, together with extensive track construction and modernisation works across Germany, have prevented DB Fernverkehr from implementing its growth plan.

The total loss for 2025 is therefore expected to reach around €2.3 billion, compared with nearly €1.8 billion in 2024. In previous years, under former CEO Richard Lutz, the company often reported more optimistic expectations than the final financial results eventually showed.

Despite this, the railway managed to achieve a slightly better operational result than expected last year. The company recorded an operating profit (EBIT) of €300 million, exceeding earlier projections that had anticipated only a modest surplus.

According to railway expert Christian Böttger from HTW Berlin, quoted by the weekly magazine WirtschaftsWoche, the current situation is largely the result of long-term construction works on the German rail network. As a result, the DB Fernverkehr division is increasingly being seen as another problematic area within the group, alongside the chronically loss-making DB Cargo.

At the end of 2025, however, Michael Peterson, head of the long-distance division, still expressed optimism in an interview with WirtschaftsWoche. "Despite all the difficulties, we have managed to make a good start to the recovery process. For 2026, we again expect a positive EBIT," he said.

DB Cargo has been in crisis for a long time and, under pressure from the European Commission, must return to profitability this year. This is expected to involve cutting 6,000 jobs out of the current 14,000 positions. Due to one-off effects such as the sale of wagons and terminals, the cargo division is expected to report a result only slightly above zero.

The figures that leaked into the German press from inside the DB group were not commented on by a spokeswoman for Deutsche Bahn, who referred journalists to the official financial results press conference scheduled for 27 March.

The situation increases expectations and pressure on the new chief executive of the Deutsche Bahn group, Evelyn Palla, who will have to assess the results of the restructuring programme she is responsible for. She was appointed to lead the group after achieving strong results in the regional passenger division DB Regio, which she managed for several years.

At the same time, the core infrastructure of Germany’s rail network is undergoing extensive renovation works, which affects long-distance, regional, and freight transport as well as the overall connectivity of the system. Corridor upgrades, for example, between Berlin and Hamburg, are taking longer than originally planned, with the line expected to reopen fully only in summer. Officials attribute the delays partly to the unusually long and harsh winter this year.

The poor financial outlook has already prompted reactions from the political opposition. Matthias Gastel, rail transport spokesperson for the Green parliamentary group in the German Bundestag, stated that the billion-euro loss in long-distance transport demonstrates how serious Deutsche Bahn’s problems currently are.

"The poor condition of the infrastructure is accompanied by poorly coordinated management of construction works. This poor coordination leads to weak results in DB’s long-distance services. It shows how closely the state of infrastructure and operational quality are connected. Regional and freight transport are also suffering in this situation," Gastel said.

According to him, Evelyn Palla must now ensure that the network is renovated while also providing predictability about where and when reliable train travel will be possible. "The management of DB Fernverkehr must also improve. Many delays are caused internally, for example, because trains were not sufficiently maintained or because staff are missing," he added.

The financial results are not affected only by the compensation payments DB must make for passenger rights violations due to delays. In 2024, these payments reached €200 million.

Another factor is the changing behaviour of passengers. Increasing unpredictability of arrival times, particularly on some corridor routes, is causing travellers to change their travel habits. Many passengers no longer want to travel by train, or cannot rely on rail transport for their journeys.

An additional indirect consequence is the growing number of overtime hours worked by Deutsche Bahn employees due to delays, although these costs are not always clearly reflected in the financial reporting.