Determinants of Profitability in Railway Transport of Selected Companies in the European Union

This paper explores the factors affecting the net profit margins of railway companies, a relatively under-researched topic. The analysis focuses on ten railway companies within the European Union from 2010 to 2019. Historically, the railway has played a critical role in economic growth, especially during the first industrial revolution. Despite its influence waning in the latter half of the 20^th century, it remains an integral component of the economy. The current rise of the green economy provides a vital motivation to focus on railways as a research subject. In this study, the authors examine the effect of six factors on the net profit margin of railway companies. The results indicate that the number of passengers, labour productivity, and the number of employees positively influence the net profit margin. Interestingly, the paper finds evidence of economies of scale in passenger transport but not goods transport. Furthermore, the study demonstrates that the number of employees positively affects the net profit margin, contradicting the widely held assumption about the low productivity of workers in the public sector and state-owned companies.