Transport Economics Working Papers WP-TR-16 Heavily Regulated, but Promising Prospects: Entry in the German Express Coach Market Matthias Walter, Fabian Haunerland and Robert Moll April 2009 Submission to: Transport Policy Dresden University of Technology Chair of Energy Economics and Public Sector Management Manuscript Click here to view linked References Heavily Regulated, but Promising Prospects: Entry in the German Express Coach Market Matthias Walter,∗ Fabian Haunerland† and Robert Moll‡ April 7, 2009 Submission to Transport Policy Abstract Express coach services in Germany have long been heavily restricted by regulation, although offerings comparable to countries like, for example, Great Britain or Sweden bear substantial opportunities for competition, the environment, and mobility. In this paper, we motivate market entry in the German express coach market for local public and integrated transport companies by high profitability rates in other countries and the availability of bus facilities and skills. This is followed by the evaluation of supply and demand. Supply is represented by an analysis of external and internal costs showing that express coaches have significant cost advantages that are intensified by the possible internalization of external costs. Demand is represented by a survey of customers that is evaluated with a conjoint analysis. Our results suggest a market share for express coach services in Germany of at least 5.3%. Keywords: Express Coach, Market Entry, Demand, Public Transport, Regulation, Conjoint Analysis ∗Corresponding author. Address: Dresden University of Technology, Faculty of Business and Economics, Chair of Energy Economics and Public Sector Management, 01062 Dresden, Germany. Phone: +49-(0)351-463-39762, fax: +49-(0)351-463-39763, email:
[email protected] †Dresden University of Technology, Germany.