Deutsche Bahn Unveils Major Reforms and Appoints First Female CEO Amid Performance Crisis

New Leadership Takes Helm at Deutsche Bahn

Evelyn Palla has been appointed as the new Chief Executive Officer of Deutsche Bahn AG, marking a historic moment as she becomes the first woman to lead the German national railway in its 190-year history. The announcement, made on September 22, 2025, follows the early departure of former CEO Richard Lutz. Palla's appointment is central to a comprehensive restructuring effort aimed at revitalizing the beleaguered rail operator.

Federal Transport Minister Patrick Schnieder unveiled a detailed 10-point restructuring plan, dubbed the 'Agenda for Satisfied Rail Customers,' on the same day. This strategic framework is designed to address long-standing issues of punctuality, infrastructure deficiencies, and financial instability that have plagued Deutsche Bahn.

Ambitious Targets Set to Combat Punctuality Crisis

Deutsche Bahn has faced severe criticism due to declining performance, with long-distance train punctuality dropping to below 60% in July 2025 and averaging 62.5% in 2024. The new reform agenda introduces revised punctuality targets for long-distance services: 70% by 2029, 80% in the medium term, and an ambitious 90% in the long term. These targets represent a recalibration from previous, more optimistic goals.

The company's financial health has also been a concern, reporting a €760 million loss in the first half of 2025. The 'S3 restructuring program,' initiated in 2024, aims to achieve a 20% reduction in infrastructure-related delays and an EBIT of €2 billion by 2027, alongside improving punctuality. Efforts to streamline administration and control costs, including the sale of logistics subsidiary DB Schenker, have contributed to reducing net financial debt by €10.5 billion compared to December 2024.

Massive Investment in Infrastructure Modernization

A cornerstone of the reform plan is a substantial investment in Germany's rail infrastructure. Approximately €100 billion is earmarked for railway improvements through 2029. Key initiatives include:

• Modernization of 24 high-performance corridors by 2030, with all corridors to be upgraded by 2036.
• Overhaul of 1,500 km of rail lines and replacement of outdated equipment.
• Upgrading 1,000 stations by 2035, focusing on accessibility, safety, and cleanliness.
• Allocation of an additional €10 billion by 2029 for digital enhancements.

The reforms also involve organizational changes, such as reducing the executive board from eight to six sections and refocusing on core railway operations, potentially divesting non-essential subsidiaries. The goal is to create a more efficient, reliable, and customer-focused railway system for Germany.