The European rail industry has gone through liberalisation in the second part of the 1990s. Although most rail companies and airlines are still publicly owned, competition from different carriers is now possible on one territory. The rail industry along with its suppliers, are constantly upgrading their products. Recent new designs include the new German ICE-300, high-speed technology on futuristic bottlenose trains. Over 60% of airline traffic in Europe is domestic or within Europe and estimates show that two thirds of these routes are “short-haul” and compete directly with rail. It is acknowledged that for rail routes up to three hours, rail is less time consuming than air as it is centre-centre and avoids crowded and cramped airports and delayed flights. In response to this trend, airlines have axed many of their short-haul flights which can be more efficiently served by rail. Freight rail transport was partially liberalised in March 2003. The freight-rail industry currently faces many drawbacks, largely due to poor investment into newfreight-technologies. The fragmentation of Europe’s railways severely affects the quality and timing of services in the international freight sector. European railways are currently working on intermodality and interoperability, two key aspects of the European Commission’s Transport programme.