Bus Companies Face Decline at the Hand of Trains, Deregulation ({{commentsTotal}})

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Business

Bus companies say they fear a massive decline in the number of intercity routes in the coming years, due to two factors: improved train connections and the deregulation of their market.

Route closures have spiked within a year, and the biggest companies say they are bracing for an uncertain period of transformation in their market, reported Postimees. In two years, predicts Taisto representative Jan Landrat, the current model of commercial long-distance bus routes will disappear. His company cut around 10 percent of its routes this spring.

The first reason, companies say, is Estonia's newly purchased trains, which have a number of competitive advantages, the main two being that they are state-funded and more frequent trips will be offered at the start of next year.

The second issue concerning bus companies is a draft public transport law being reviewed by Parliament that will, most importantly, get rid of restrictions impeding firms from competing on routes that have already been licensed to other companies.

For some of the routes that have closed recently, called public routes, replacement operators will be found, as the state subsidizes certain routes to ensure access to transport to residents in sparsely populated areas. Yet the government has had trouble finding new operators for some of the routes.

Other discontinued routes, the commercial ones mostly serving long-distance intercity lines which do not have the demand deemed necessary by the state, will be shut down indefinitely. Still others will continue to operate precisely because they do not run parallel to train lines.



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