The company, MSM, will be offering customers tickets from just over €19 – an initiative CEO Nike Maedge likened to that of “a budget airline with a variable pricing system.”
The cheapest ticket Deutsche Bahn offers for a one-way journey is €29.
Currently, Deutsche Bahn enjoys a monopoly, providing Germany's only high-speed intercity trains – the ICE and the IC. This earns the company around €3.8 billion each year, according to reports from the German Financial Times (DFT) on Thursday.
If MSM's plan is successful, it will be Deutsche Bahn's only direct competition – a role other companies have tried, but failed, to fill.
Deutsche Bahn runs around 40 trains a day between Cologne and Berlin via Hamburg, while MSM announced that customers would be offered just two connections daily, as the company only has four engines and 30 carriages.
They hope the trains will carry travellers between Cologne and Hamburg in less than five hours. Deutsche Bahn's quickest trains manage the journey in around four.
People wishing to travel on one of MSM's trains will not have to worry about having to stand in the aisle for several hours, as reservations will be mandatory.
“Otherwise we might scare customers off,” said Maedge to the DFT.
Other companies have tried to crack Deutsche Bahns's stranglehold of the German railways. Would-be competitors have included French company Veolia, which briefly offered trains between the eastern cities of Leipzig and Rostock before pulling them off the rails.
MSM, however, has some limited experience operating trains in Germany, as it is one of the few companies to have successfully run trains alongside Deutsche Bahn. For the last five years it has provided transport for people travelling from the Ruhr Valley to Austrian ski resorts.