Does the incumbent have an advantage in open access passenger rail competition? A case study on the Prague–Brno line

Tomeš, Zdeněk; Fitzová, Hana

doi:10.1016/j.jrtpm.2019.100140

Cited by 12 publications

(11 citation statements)

References 12 publications

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“…Both started from the main line of the country, the Prague–Ostrava, doubling the number of passengers between 2010 and 2016 (Tomeš & Jandová, 2018). The second line of the country, Prague–Brno, opened in 2016 (Tomeš & Fitzová, 2019), reaching also Wien and Bratislava. Much later, newcomers were able also to enter the regional PSO market.…”

Section: Open-access Competition In Europe and Focus On Pricesmentioning

confidence: 99%

A Difference-In-Difference Approach to Estimate the Price Effect of Market Entry in High-Speed Rail

Beria

Tolentino

Shtele

et al. 2022

Competition and Regulation in Network Industries

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The effect of competition on prices in the passenger transport sector can be difficult to estimate because of many influencing factors such as state regulation, demand, seasonality, and reactions of indirect competitors. A case of great interest in the rail sector is Italy, where on-track competition in the high-speed segment has been in place for nearly ten years. The paper aims at answering the question whether—and how much—incumbent’s prices are affected when competition starts on a route previously in monopoly. The case is the start of operations on the Turin–Milan–Venice route, where Italo entered in May 2018. Adopting a difference-in-difference approach, we check if Trenitalia changed the price strategy on the route before and after the entry, with respect to two control groups. The addition of placebo tests allows us to understand the ranges of significance of the results and to estimate the noise level of the estimates. Our findings suggest that the start of competition led to lower prices in the short-medium period. In the specific case, the Milano–Venezia route saw Trenitalia’s prices reduced by 21–26% (±2–5%) in a time span of 84–140 days after Italo’s entry and for advanced bookings from 2 to 10 days. Last-day prices remain unchanged, while early bookings are reduced by just 9%. This price reduction does not remain stable in the longer term, when other effects add up and blur the effect of the entry. Nevertheless, we keep observing a smaller, ∼15%, but still negative prices change.

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Section: Open-access Competition In Europe and Focus On Pricesmentioning

confidence: 99%

A Difference-In-Difference Approach to Estimate the Price Effect of Market Entry in High-Speed Rail

Beria

Tolentino

Shtele

et al. 2022

Competition and Regulation in Network Industries

View full text Add to dashboard Cite

show abstract

“…For instance, Tomeš et al (2014) show an improvement in both frequency and services on the Prague-Ostrava line. Using a consumer survey, Tomeš and Fitzová (2019) conclude the same for the Prague-Brno line: OA competition increased the quality of services, especially for the incumbent's trains.…”

Section: B Country Experiences In Opening European Railway Marketsmentioning

confidence: 86%

“…33 However, sometimes the users' experiences with the incumbent can be also a competitive disadvantage if the latter commonly has delivered low quality of its services in history. In their survey quoted above, Tomeš and Fitzová (2019) show that the incumbent's services were used more often by older people, people holding loyalty cards, and business passengers.…”

Section: A Structural Barriers To Entry: Lack Of Entry and Reasons For Exitmentioning

confidence: 99%

Which access to which assets for an effective liberalization of the railway sector?

Bougette

Gautier

Marty

2021

Competition and Regulation in Network Industries

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In the European rail industry, to enable competition in the market, entrants should be granted access to a large set of complementary services, beyond access to the tracks. For an efficient and effective entry, temporary access to quasi-essential complementary assets like rolling stock, mechanical maintenance workshops, data, schedules, etc. is required. In the liberalized rail sector, several observed anticompetitive practices involve distorted access to these quasiessential facilities. Therefore, competition agencies must deal with litigation between the incumbent and new entrants. Most cases have been settled, resulting in commitments from the incumbent. We argue that such transitory and case-by-case remedies fail to produce favorable conditions for a secure and efficient entry. Thus, we propose to systematize such remedies through asymmetric and enduring ex-ante regulation.

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“…To date, only a few studies examine the effects of the liberalization of high-speed rail in the Czech Republic (Jandová and Paleta, 2019;Tomeš and Fitzová, 2019). discuss the impacts of the direct competition on the Ostrava-Prague route and concur with Preston et al (1999) that this type of competition leads to a price war-falling ticket prices, an increasing number of connections, improving service quality, and innovations to attract new customers.…”

Section: [Figure 1 About Here]mentioning

confidence: 89%

Liberalizing Passenger Rail: The Effect of Competition on Local Unemployment

Badura¹,

Melecky²,

Melecký³

2021

SSRN Journal

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Competitive passenger rail can help workers access new or better jobs. This paper studies the wider economic impacts on local unemployment of the liberalized passenger rail between Ostrava, the third-biggest city in the Czech Republic, and Prague, its capital. The local impacts are estimated at the LAU 1 level (administrative districts) using the difference-in-differences method. The liberalization motivated the entry of two new private providers. The resulting competition in ticket prices, the number of connections, and service quality had a strong beneficial effect on labor market connectivity. It significantly reduced unemployment in the districts along the line compared with the control districts. The effect weakens with the level of urbanization of the treated district. It could partly transmit through higher firm entry and lower firm exit in the local market, as well as better skill matching on the back of higher inward and outward migration.

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Does the incumbent have an advantage in open access passenger rail competition? A case study on the Prague–Brno line

Cited by 12 publications

References 12 publications

A Difference-In-Difference Approach to Estimate the Price Effect of Market Entry in High-Speed Rail

A Difference-In-Difference Approach to Estimate the Price Effect of Market Entry in High-Speed Rail

Which access to which assets for an effective liberalization of the railway sector?

Liberalizing Passenger Rail: The Effect of Competition on Local Unemployment

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