E. Sambracos Associate Professor in Transport Economics Dept. of Maritime Studies University of Piraeus Air - Sea Transport: Competitiveness or Complementarity in the Greek insular market?

Patra Air transport: liberalized market oligopoly characteristics, few operators, interrelated and depended regarding their decision making offering homogeneous products Price competition strategies Coastal shipping and air transport market

Patra Coastal shipping and air transport market Coastal shipping diverse, regulated oligopoly (small number of enterprises, interrelated and depended, offering of homogenous or diverse products) no price competition, but competition through diversification strategies, focusing on quality factors (speed, improved areas for passengers, trained personnel etc.)

Patra Transport demand Sea transport demand determinants the price of the ticket (fare) the existence of substitute transport means (air transport) the population of the region the income levels of the population the quality of the offered transport product the preferences of the consumers and the seasonal character of Greek coastal shipping (peak and off peak seasons) Air transport demand determinants The same but the income plays a more important role

Patra The structure of the markets

Patra Servicing Insular Greece

Patra Comparing the two sectors Unequal development There are markets where the two transport modes are competitive, and should be in favor of the airplane, due to its favorable characteristics on quality Why did sea transport showed a higher level of development? What is going to happen after the liberalization of the coastal shipping market?

Patra Towards a typology of the users profile The survey Western Airport of Elliniko and at the seaport of Piraeus on February 17 th Routes Athens – Mytilini, Lesvos Athens – Rhodes and Athens – Heraclion, Crete

Patra The passengers’ profile

Patra Passenger's perception towards air and sea transport factors affecting their decisions:  the cost of the trip (c)  the existence of a substitute means of transport (s)  the quality of the service (q)  the time the trip involves (t)  the feeling of fear towards the mean (w)  and whether the route was appealing (r) D = f (c, s, q, t, w, r)

Patra Reasons for using seagoing vessels and not the airplane

Patra Reasons for using the airplane and not the seagoing vessels

Patra Survey Conclusion Cost and time are the two main factors that passengers take into account when traveling. Air passengers consider time as the most important demand factor while sea travelers consider cost when choosing their transport mode. there is not substantial competition between the two modes mainly because passengers have different perceptions, that mainly derive from their income status.

Patra Liberalisation of Coastal Shipping In view of the liberalization of the coastal shipping market (cabotage) in November 2002 and the upcoming internal competition, maritime companies are already introducing new quality standards in the market (new, high speed, new technology vessels). Change in the relationship between the markets Competition in terms on price and quality

Patra Implications for air carriers Competition in terms of quality and prices To attract customers, the notion of different cost levels should be well considered, while forming the appropriate pricing policy. Since there are customers with different elasticities of demand there should be a Price Discrimination policy applied, including different pricing levels according to the levels of elasticity, that would attract new customers.

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