1. The European Coach Market 1 Results of 2008/9 European Commission study Challenges and opportunities for the future Prepared for: IRU 1 March 2012 Prepared by: Steer Davies Gleave 28-32 Upper Ground London, SE1 9PD +44 (0)20 7919 8500 www.steerdaviesgleave.com

2. The European Coach Market 2 Passenger Transport by Coach in Europe Ι The European Commission required a thorough review and analysis focussing on passenger transport by coach across Europe Ι This consisted of Collection and analysis of coach sector data, including for cabotage services Analysis of coach accident data Analysis of the role of terminal infrastructure Case study of the 12-day rule on driver rest days Ι Steer Davies Gleave is an independent consultancy working worldwide across the transport sector Ι We carried out this study in 2008/9 with a team based in our London, Bologna and Madrid offices, supported by the Vehicle Safety Research Centre in the UK, and by sub-consultants in central Europe

3. The European Coach Market Contents Ι Context – legislation Ι Statistical summary Ι Issues: Cabotage Access to terminals Ι Opportunities

4. The European Coach Market 4 Context – European legislation Ι Less European legislation applying to the bus or coach sectors than rail or air Ι Distinction between domestic and international regulation, international occasional market liberalised in the EU and regular international liberalised subject to national authorisation Ι Requirements on international carriage of passengers within the EU are defined in EC Regulation 1093/2009 Ι Regulation 561/2006 also sets out rules on driving times, breaks and rest periods Ι Regulation 181/2011 now defines passenger rights including if services delayed or cancelled passengers with reduced mobility (PRMs)

5. The European Coach Market 5 Context - Market organisation Ι Significant variation in regulatory arrangements in different States Ι Study focussed on 8 States with different market structures Member State Regulated – restricted Regulated – concessions Deregulated Germany Greece Italy partly Poland partly Romania Spain Sweden UK

6. The European Coach Market 6 Statistics - Introduction Ι Coach and bus are grouped together in most national statistics No consistent definition of coach services Definition used determined by the approach taken by each Member State Where a particular approach has a big impact on the statistics we have noted this Ι For States where data is not readily available, extrapolated based on data from other Member States Ι Some factors affect the statistics significantly, e.g. school transport: UK, France, Spain, Sweden and Ireland all contract special regular services that significantly affect number of passenger journeys. Some EU citizens take the majority of their lifetime coach journeys whilst at school

7. The European Coach Market 7 Coach demand against GDP Ι Coach travel is higher in the lowest income States. Increased incomes over time in these States can lead to: Greater car ownership Greater ability to afford to fly Possible higher investment in competing rail services/infrastructure Ι However, coach travel is growing, albeit slower than GDP, in some western European States (France, UK, Spain) Ι This suggests that an increasing propensity to travel by all modes may increase the volume of coach travel, but probably not market share

8. The European Coach Market 8 Coach market share against other modes of transport Ι Turkey and Bulgaria - high levels of bus and coach travel reflect low levels of car use Ι Germany and France, high rail share impacts on coach. The reverse is true in Greece Ι France – coach is higher than in reality as some bus classified as coach

9. The European Coach Market 9 Proportion of coach journeys that are international Ι In most member states, the vast majority of coach journeys are domestic Ι The main exceptions are Austria and Germany, which both have large markets for outbound international coach tours, and have very little domestic regular markets

10. The European Coach Market 10 Fares Member StateCoach fares relative to rail Sweden, UK and Germany*Significantly lower (by ~50%) than rail RomaniaLower than rail Greece, Italy and PolandSimilar to rail Spain-Significantly lower than High Speed rail where this exists -Similar to rail fares on other routes * where regular services permitted Ι Coach fares are generally lower (sometimes significantly so) than rail

11. The European Coach Market 11 Summary of estimates Total EUAll States Passenger-kilometres (millions) 262,983540,512 Vehicle-kilometres (millions) 10,13419,899 Passenger journeys (millions)6,6217,584 Fleet size248,897445,715 Employees (bus & coach)1,546,9552,255,445 Annual turnover ( millions)15,42523,560

12. The European Coach Market 12 Issues: Cabotage Ι Cabotage is defined as the operation of services within a Member State without having a registered office in that State Ι In 2008/9, in the majority of the case study countries, the level of cabotage services was very low and does not have a significant impact on the transport market Ι Regulation 1093/2009 expands the scope of cabotage operations permitted if part of a regular international service, cabotage no longer has to be temporary removes the right of States to apply safeguard measures

13. The European Coach Market Issues: Access to terminals Ι Good terminal infrastructure can facilitate the development of the market by providing services such as: Quality of customer service and facilities for passengers Efficient scheduling of departure slots Ι Access to terminals not relevant if market access itself is restricted (eg. Germany, Greece) Ι In some other States terminal access may be a problem: Poland: PPKS (State) companies own and operate services at Warsaw and other terminals Spain: Access guaranteed for domestic, but Madrid terminal operator fined 450k for anti-competitive abuse on international Ι Integrated ticket sales desk may help reduce costs (if neutral)

14. The European Coach Market 14 Opportunities – Liberalisation? Ι Study did not recommend particular market or regulatory structures Ι Liberalisation of regular services has a range of potential benefits: more services more competition greater cost efficiency lower fares Ι Some potential disadvantages: reduced potential for transport integration reduced co-ordination of services Ι No equivalent disadvantages to liberalisation of occasional services Ι Clarifying the meaning of temporary cabotage in the existing legislation could reduce the scope for Member States adopting their own, overly restrictive, interpretations

15. The European Coach Market Opportunities – Help governments reduce subsidy? Ι Regular coach services often do not need any subsidy despite offering lower fares than rail Ι Some EU governments have announced cuts to rail services due to lack of funds (Greece, Portugal) Ι Could coach be an alternative for medium/long distance routes? Ι Likely to be particularly attractive where: Lower volume services (rail needs high volume to be cost-efficient) Poor rail infrastructure Good road infrastructure Integrated into other transport systems

16. The European Coach Market 16 Thank you