COVID-19 emergency Since the first few months of 2020, the FS Italiane group has been - and continues to be - actively committed to dutifully and carefully handling, with an approach it has shared with all stakeholders, the unprecedented and extraordinarily complex health, socio-environmental and economic crisis that the country faces in the wake of the global coronavirus outbreak. The group has responsibly assessed - always considering the internal and external actions and measures, as well as the developments under way - the current and future operational, organisational, economic and financial impacts on operations in the near future as well. The pandemic put severe pressure on the national healthcare system in 2020, compelling the government authorities to issue a series of mobility restrictions to contain the risk of further spread throughout the population. Consequently, the COVID-19 emergency has progressively impacted the regular and ordinary performance of operations. Specifically, as the coronavirus spread, the transport market experienced sharp contractions in passenger volumes and the infrastructure sector suffered delays in the start and progress of construction work. In the very early stages of the emergency, as the group waited to see how the situation would evolve, it did not change its commercial offer, thereby guaranteeing regular mobility service for passengers and freight. Then, as it became clear that the country was facing a genuine emergency, the situation in the transport sector became critical. Accordingly, while the drop in volumes was initially caused by plummeting demand in tourism and business travel, transport volumes plunged dramatically across practically all passenger transport sectors and, within the space of a few weeks, they dropped in the freight sectors as well, largely due to the urgent and necessary government measures taken nationally and locally with a profound impact on Italians’ mobility. Furthermore, the sharp contraction in railway services and road mobility had significant consequences on traffic with respect to the operating of the railway, road and motorway infrastructural grid, and this affected the income that the group earns directly and indirectly from tolls, fees and royalties. In this way, the first phase of the lockdown triggered a supply crisis, which rapidly became a demand crisis as well, ushering in recessive dynamics and changes in people’s lifestyles and mobility. Indeed, passenger traffic nosedived 90% and freight transport was halved. Starting in mid-May, as the lockdown orders were lifted and traffic progressively reopened, first regionally and then between regions, traffic volumes recovered. However, the easing of restrictions on economic and social activities in the summer months and the arrival of cooler temperatures in autumn led to a violent second wave of the virus, causing another slowdown in economic activity in Italy due to social distancing measures, the forced closure of non-essential activities and another round of mobility restrictions. Overall, the year saw a sharp drop in collective demand for passenger traffic (passenger-km down by 60.3% on the previous year), while the loss of freight traffic volumes was more modest (tonnes-km down by 6.1% on 2019). The group – and transport companies in particular, which were the hardest hit by the emergency – immediately responded and, consequently, conducted a broad and extensive analysis of the effectiveness and efficiency of reorganising passenger and freight transport according to the effects of the situation described above, with selective projects and the temporary, targeted suspension of operations in certain units at operating and maintenance sites where it is impossible for workers to work remotely. Furthermore, from the onset of the emergency, the FS Italiane group took all the appropriate and recommended measures to limit infections and manage the pandemic, which was also in compliance with the government virus containment and social distancing measures to protect the health of employees, customers, suppliers and, in general, the
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