Market liberalization of domestic long-distance bus services: evidence from deregulated EU countries and prospects for the market

Abstract

Long-distance coach services have long remained a marginal mode of transportion across Europe. While high speed rail and airlines attract much more political and media attention, the bus and coach industry has only recently caught the attention of policy makers. In a monopolistic and heavily state subsidized transportation market, coaches have been mainly used to cover residual and remote areas without access to rail infrastructure or proper public transportation. However, in the last decades long distance coaches have experienced a significant revival especially among the low-income segment of population, offering a valid alternative to those who do not have access to a private car or rail. Bus and coach industry has been slowly opening up to competition across all European Member States but significant differences regarding the regulatory framework for access to national road passenger transport still persist inside several national domestic markets. The UK and Nordic States have been long liberalized, while Germany, France and Italy have only recently opened their markets to private competition fostering the growth of this industry rapidly. Today the sector is witnessing a small revolution and even if it is a recent phenomenon the results in recently liberalized countries are promising. Studies conducted mainly by the European Commission, show that the effects of opening the long-distance bus market have been encouraging especially in terms of new entry, higher frequency, lower fares and a better service with higher quality standards. This thesis makes a careful review of the current situation in the interurban passenger transport market by bus describing the main developments that have taken place following the market liberalization with a specific focus on performance related effects covering economic, social, environmental and operational dimensions.