Intercity coach liberalisation. the cases of Germany and Italy

Intercity (or long-distance) coach transport has long remained a marginal mode in Western and Southern Europe. It connected mainly residual origin-destination relationships, to marginal areas without rail transport or, at best, as an ancillary mode to extend the range of rail accessibility. However, the recent experiences of German and Italian liberalisations can represent a turning point in the redefinition of the role of this industry. In particular, Germany showed that a competitive environment could foster the sector and make it a true alternative for car and rail, especially in the low cost demand segment. In Italy, instead, the liberalisation effects are appearing more slowly, also due to the fragmentation of the sector and to the relative maturity of the historical market, but more and more pervasively. While it is clear that a favourable legislative context and the limitedness level of entry barriers are necessary conditions for liberalisation, other elements appear to have a profound influence to explain the important differences between the two cases of Italy and Germany. The paper aims at discussing the role of two further aspects: i) the characteristics, and in particular the dimension and concentration, of the before-liberalisation market, and ii) the geography of the countries. When considering these elements, it becomes clearer why the processes ran at very different speeds north and south of the Alps and why the two markets still appear different.