Effects of liberalisation and evolution of the long-distance coach transport markets in Germany and Italy

The aim of this master thesis is to describe and analyse the long-distance coach transport market and its evolution after the deregulation processes have been developed in most European countries. A particular focus is given to Germany and Italy in order to concentrate on specific cases with the aim of understanding the different evolution of the two markets. Diverse regulatory regimes, geography, cultural aspects are all intertwined to motivate why the market developed quite differently. Considering the German case, the openness to competition has definitely brought positive results. From the supply side, the offer was brought from 20 million kilometres in 2012, to 135 million kilometres in 2014 (Beria et at., 2015). Differently from Germany, Italy presented already a well-developed coach market, especially in the Southern regions, although the Italian market was very fragmented and authorities would let local operators acts as monopolists in some areas. In 2016, the coach sector was counting 10 million passengers, which consist in the 12% of the total medium and long-distance travels (ART, 2017). The liberalisation changed those eradicated habits and equilibria, while allowing the entrance of international operators in the market. The competition became fierce, while enhancing the offer and increasing the quality of services. Therefore, the results also in the Italian market have to be considered positive in a way that made the incumbents and newcomers develop new routes and increment the connections available for customers. Incumbents reacted by upgrading their traditional methods in order to keep up with changing times, such as offering nice and clearly navigable websites for customers, adapting the old business models or figuring out new solutions for pricing strategies. Another aspect is the presence of a different way of transport, the well-known carpooling, and the discussion whether it could be considered a competitor, a substitute or simply a trigger for the evolution of the market, can still be open, especially considering a possible evolution of this service in cooperation with PSOs. A particular focus is given to the company FlixBus, being a start-up few years ago in Germany (2013) and now spreading its successful business model towards the rest of Europe and Russia too. It is actually a quasi-monopoly in Germany and the first operator in Italy, where recently signed a partnership with one of its main competitors (Baltour). After the liberalisation, the market evolved and nowadays presents this quasi-monopoly of FlixBus, rising the suspect that also prices might need to be ruled. From the data available, it appears that the general level of prices was not subject to a significant increase. These can be explained because in the medium and long-distance transport there is still a considerable degree of substitutability among means of transport (airplanes, railways, car-sharing, buses) and therefore no restrictions in terms of prices would be needed.