Stadler Rail Faces Scrutiny Amid Tram Incidents and Upcoming Financial Report

Stadler Rail navigates a Milan tram derailment investigation and TINA model retrofits while achieving operational milestones with new high-speed trains and digital ventures.

The Swiss rail vehicle manufacturer Stadler Rail is navigating a complex period as it prepares to release its annual financial results on March 18. This comes in the wake of a serious incident involving one of its trams in Milan, which is now under criminal investigation, alongside separate technical challenges with another model.

Milan Derailment Draws Legal Focus

A newly commissioned Stadler tram derailed in Milan on February 27, resulting in two fatalities and approximately 50 injuries. The Tramlink model involved had only entered service with the local transport operator ATM on February 20. The accident occurred on line 9, where the new tram type had been operational for mere weeks.

Judicial authorities in Milan have opened an investigation for negligent homicide, bodily injury, and the negligent causation of a railway disaster. Attention is centered on the vehicle's "dead man's switch," a safety mechanism designed to automatically halt the tram if the driver releases the control. Investigators are examining whether this critical system failed. The driver has been formally registered as part of the probe.

ATM has stated it is cooperating closely with the judiciary. Approximately 350 Tramlink vehicles are currently in operation across several countries, including Germany, Switzerland, Hungary, Spain, the United Kingdom, and Austria.

Concurrent Technical Issues with TINA Model

Separately, Stadler is addressing technical problems with its TINA tram model. Operations in Darmstadt and Basel were halted following complaints about excessive noise and vibrations. An independent study in early 2025 confirmed that vibration levels were 25% higher than in older models, attributing the cause to newly designed bogies.

In response, Stadler will retrofit all 25 affected vehicles at its own expense by the end of 2026. The upgrades will include additional yaw dampers and new wheel profiles. Despite these initial difficulties, six cities have placed orders for TINA trams.

Operational Milestones Provide Positive Momentum

Amid these challenges, the company has reported significant operational successes. On March 1, Austrian operator WESTbahn put three SMILE high-speed trains into service. With a top speed of 250 km/h, the 202-meter-long trains are now the fastest in regular Austrian passenger service. Notably, their deployment was completed in less than two years from contract signing, significantly faster than the industry standard of four to five years.

In freight transport, Alpha Trains and Lineas signed a leasing agreement for two EURO9000 hybrid multi-system locomotives for the Rhine-Alpine corridor. The first unit is scheduled for delivery in March. This project is receiving €15 million in support from the German Federal Ministry for Digital and Transport.

Strategically, Stadler is advancing its digital capabilities through a new joint venture, Stadler Digital Labs, formed with Critical Software (51:49 split). The venture already employs 100 staff in Portugal, with plans to expand to 300 within three years.

Financial and Governance Crossroads

The group anticipates surpassing CHF 5 billion in revenue for the first time in 2026. However, investors will be closely analyzing the presentation on March 18 for details on margin development and the efficiency of converting its substantial order backlog into revenue. They will also assess the financial impact of the special costs for the TINA retrofits and any potential legal repercussions from the Milan incident.

A leadership transition is also on the horizon. At the Annual General Meeting on May 5, long-serving board members Christoph Franz and Wojciech Kostrzewa will step down. Their nominated successors are Sabrina Soussan, former Co-CEO of Siemens Mobility Division, and Michael Schöllhorn, CEO of Airbus Defence and Space.