Paolo Beria, Raffaele Grimaldi, Antonio Laurino Dipartimento di Architettura e Pianificazione

1. The Italian intercity market model Paolo Beria,Raffaele Grimaldi,Antonio Laurino Dipartimento di Architettura e Pianificazione Politecnico di Milano Associazione Nazionale Autotrasporto Viaggiatori

2. CONTENTS Long distance coach transport in Italy Carachteristics of LD coach transport Ideas for a future of the industry Conclusions

3. Long distance coach transport in Italy An unknown sector • Long distance coach services are almost unknown in Italy, despite its quantitative importance: • users usually only know the line they use; • non users often ignore the existence of a significant alternative network to rail services ; • public opinion ignores the sector; • public policies tend to concentrate only on rail. No specific policies for coach. • The industry in Italy is already mature and developed, even if liberalisation is expected to change and further develop it a lot. • This study, commissioned by ANAV and recently presented, tries to shed a light on the sector

4. Long distance coach transport in Italy Regulation Local public transport (incl. 2-regions services) Interregional services (more than 2 regions) Charter services “Interregional road services of State competence” “Passenger services supplied by coaches on road, with undifferentiated supply, operated continuously or periodically on paths linking more than two regions” - D.Lgs. 285/2005 The sector was liberalised since 2007, moving from exclusive concessions to non-exclusive authorisations. Up to 31 December 2013 firms can keep existing concessions. A monitoring activity is foreseen to control liberalisation effects and avoid possible disruptive competition.

5. Long distance coach transport in Italy Integration or competition Historical framework of long distance public transport in European countries. Modal competition Hierarchic / planned Air Bus and coaches Air Rail Rail Bus and coaches Competition among modes allowed (e.g.UK, Sweden, Italy future ...) Strong core rail network + feeding buses (e.g. France, Germany, Switzerland) Bus and coaches Competition, but with areas of protection of rail (e.g. Italy past) Air Rail

6. Long distance coach transport in Italy ANAV coach companies Bus-km 2010  Method: Reconstruction of all 2011 services from timetables Survey of 2010 data on supply (incopmplete)  Sample: - ANAV companies which gave data for 2010; - Only State competence services (no services among two regions). 2010 supply estimation: > 90 millions bus×km/year More than 19 millions bus-km (estimated) 72,8 milions bus-km (sccounted) * TRASPOL simulation on 2011 timetable

7. Long distance coach transport in Italy National services in Italy Assuming an average load factor of 30 passengers per vehicle, we estimate about 3.000 millions passengers-km. Universal Service (Servizio Universale) is the name for subsidised long distance trains in Italy (see later). Subsides are directly awarded to Trenitalia (no public tenderings). “Non subsidised/non market” are services that Trenitalia claims to be operating without subsides though loosing money. These have been kept (up to now) for political reasons.

8. Long distance coach transport in Italy National services in Italy • Graphical representation of weekly services, per region/geographical area. • Significant North-South services • Maximum number of services between Rome and the South • Important internal relations in the Centre and in the South • Limited services in the North. • (note: obviously, frequencies can’t be summed up, because of different paths)

9. Long distance coach transport in Italy National services in Italy • Graphical representation of weekly services, per region/geographical area. • Significant North-South services • Maximum number of services between Rome and the South • Important internal relations in the Centre and in the South • Limited services in the North. • (note: obviously, frequencies can’t be summed up, because of different paths)

10. Long distance coach transport in Italy National services in Italy • National coaches in Italy nowadays serve mainly: • Long distance services, in partial competition with rail and air transport • Medium distance services, where rail service is poor, uncomfortable (needs interchange, etc.), too expensive (HSR) or not existing at all • Tourist services (usually seasonal)

11. Long distance coach transport in Italy I servizi nazionali Line with restrictions (no in/out in some stops) Line without restrictions Weekly frequency, per direction Long distance coaches cover the whole distance range (100 -1630 km) Line lenght [km]

12. Long distance coach transport in Italy International services

13. CONTENTS Long distance coach transport in Italy Carachteristics of LD coach transport Ideas for a future of the industry Conclusions

14. Characteristics of LD coach transport in Italy Main characteristics and comparison with other modes • Strenghts • Extensive geographical coverage, even in very low density and dispersed areas • High flexibility and ability to fit changes in demand • Low costs and, as a consequence, low fares, without any public subsidy: the industry does not cost anything to the State • Commercial viability for direct services where impossible for rail because of low density of demand • Higher perceived personal security for passengers, especially on night services • Weaknesses • Poor visibility, still developing and fragmented marketing policies • Low commercial speed, although good in terms of door-to-door for many relations. In congested contexts possible uncertainties on travel times • Difficulty of movement on board requires stops on longest trips (further reducing commercial speed)

15. Characteristics of LD coach transport in Italy Main characteristics and comparison with other modes Example of geographical coverage in Puglia region (southern Italy) of services from northern Italy: Marino network(not the only coach company!) vs. Trenitalia network

16. Characteristics of LD coach transport in Italy Terminals The attitude of local administrations towards terminals is differenciated in Italy: hostility(terminals outside city centres, claiming to reduce congestion) integration(terminals as a part of multimodal interchange stations) expulsion coachway interchanges city terminals Marginality Problems for remaining users Progressive loss of users Lower accessibilty and need for effective linking infrastructures Marginality and lower visibility Higher commercial speeds Easier integration in the city Long diversion times Higher visibility Possibly difficult integration with the city structure Good practices: Bologna, Roma Tiburtina TiBus (though claims for inadequate capacity), Catania. Partially good: Milano (good design, but distant from city centre).

17. CONTENTS Long distance coach transport in Italy Carachteristics of LD coach transport Ideas for a future of the industry Conclusions

18. Ideas for the future of the industry New markets or consolidation of existing industry? Three perspectives for Italian market: 1. Consolidation of existing market, inside the new liberalised context  more efficiency  quality 2. Market expansion towards new users (generated or diverted from rail thanks to low fares)  new (and new kind of) services  marketing and communication 3. Integration/substitution of rail in the “universalservice” (subsidised long distance trains)  political choice!

19. Just changed & reduced… (Dec 2011) Ideas for the future of the industry Trenitalia “rail universal service” 2011 National coaches 2011 Trenitalia “universal service” Supply: 27 Mtrains-km (further reduction in 2012) Public subsides: 250 M€/y Supply: 90 Mbus-km Public subsides: 0 €

20. Ideas for the future of the industry Il servizio universale Trenitalia I servizi nazionali Rail services (subsidised “universal service”) are almost perfectly superposed to national coaches: similar average frequencies, same distance range!

21. Ideas for the future of the industry Il servizio universale Trenitalia Air transport reference market: long distances, at least daily frequencies LD rail transport reference market: <800km services, high frequencies Market “in competition” with rail “universal service” Coaches “exclusive” market

22. Ideas for the future of the industry Il servizio universale Trenitalia Air transport reference market: long distances, at least daily frequencies LD rail transport reference market: <800km services, high frequencies Field of potential (partial) substitution with rail “universal service”

23. Ideas for the future of the industry Trenitalia “universal service” – costs estimate Data received from 12 firms (27 million km) suggest average unit costs of 1.34 €/bus-km (min 0.96 - max 1,97) Most likely higher than market service costs because of less economies of density (scale?) LD coach: 2.7 €cent/seat-km (50 seats/coach) LD train: 4 €cent/seat-km (500 seats/train)

24. Ideas for the future of the industry A new “universal service” • A typical night train of the “universal service” in Italy nowadays often serve both as: • InterCity service on short/medium distance during the evening and the morning among places internal to northern and southern Italy; • long distance night service among northern and southern Italy. • In some cases, the reorganisation of existing services, separating functions, might allow for significant cost savings and, in some cases, for a better service, using different transport mode. • Although no disaggregated public data on patronage of those (subsidised) services are available, possible multi-modal reorganisations with combined rail, air and coach transport might require less subsides.

25. Ideas for the future of the industry A new “universal service” - example Present situation: 4 daily night trains from Torino, Milano, Bolzano and Trieste  to Foggia, Bari e Lecce Nothing is known about demand Estimated Trenitalia cost: approx 62 M€/year

26. Ideas for the future of the industry A new “universal service” - example • (one) Possible rationalisation: • 4 InterCity trains, Torino + Bolzano + Trieste + Milano  Rimini for commuters • 3 regional trains Foggia/Bari  Lecce for commuters • 10 night bus lines to connect all O/D with no more than 1 interchange • (example: Venezia - Padova - Terme Euganee - Monselice - Rovigo - Ferrara - Ravenna - Rimini (HUB) - Foggia - Barletta - Bari) Note: bus lines on the map are not representative of the 10 simulated paths More complex, but sufficient to serve all relations. Estimated cost: 35M€/year instead of 62M€/year with rail. Room for possible additional services during peak days (also with train)

27. CONTENTS Long distance coach transport in Italy Carachteristics of LD coach transport Ideas for a future of the industry Conclusions

28. Conclusions Inside the industry and towards the outside • Coach transport will face significant changes in regulation inside and outside the industry. Starting from a deeper knowledge of itself, significant opportunities for change will be at stake: • Evolution inside the industry; • Evolution towards other markets. • In order to do so, it needs to adopt adequate technological tools (e.g. yield management) and learn from what happened in other industries, especially air transport, and abroad.

29. Conclusions Inside coach transport… • Ideas: • Overcoming focus of firms over their historical catchment areas to better take advantage of the liberalisation: • Many small markets  a unique (bigger) Italian market • 2. As for operating costs: in this sector “medium-small is better”! • But for commercial aspects: useful to consolidate on bigger average dimensions (difficult for very small firms to make advanced marketing). Better using consortia, to avoid cost increase typical of bigger firms. • 3. Unique internet website, where users can find the whole supply, to be perceived as a unique network as for air transport (even without delegating the commercial functions).

30. Conclusions … and towards the outside! • Opportunity for completely rethink the concept of “universal service” (also because Italy needs to cut public expenses): ensure mobility all over the country, but not necessairly by train! • Example (but other outcomes are possible): • Subsidised trains (but even non subsidised!) relations with high demand and among major cities; • Coaches  long relations with low demand, with polarised and dispersed demand (e.g. north-south) and to improve geographical coverage; • Busses  medium-short relations with low demand; • Airplanes  social (subsidised) fares on some long relations.

31. Thank you for your attention!!! paolo.beria@polimi.it raffaele.grimaldi@polimi.it