Express coaches: An up-hill battle after liberalization?

Abstract

Express coach services have thrived in Norway following the stepwise liberalization that started in the mid-1990s. However, recent years have witnessed consolidation, stagnation, and, sometimes, decline in the Norwegian express coach market. In this paper, we study this process of rapid growth which turned into gradual decline in Norway. Looking at factors contributing to this development, we investigate intermodal competition with local public transport, air, car and rail; and the effects of increased public-sector involvement - both as a passenger transport provider and as an infrastructure provider. This paper relies on three data sources and methods: 1) National travel survey data2) Historical market dataand 3) Case studies. Our main findings are that, following liberalization, express coach services were mainly established in markets underserved by other modes, where express coaches had lower operating costs as well as generalized costs than the available alternatives. These markets have gradually been provided with better alternative transport services: For the long-distance coach lines, competition from low-cost air carriers has been significant. For shorter lines, improved road infrastructure and rail services have increased competition by private cars and rail. Also, initiatives to increase and improve local public transport have impacted the express coach industry.