Competition in Finland heats up

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FINLAND Long-distance passengers have more options following the launch by Omnibus of a new route between Helsinki and Vaasa and increases in the frequency on four of its other routes. Competitor Koiviston Auto, in turn, is cutting fares on routes serving 13 cities. Other operators are expected to announce similar changes as the year unfolds.

“Services will increase rather notably in the course of the year,” said Jarmo Oksaharju, Managing Director of Matkahuolto. It’s beneficial for consumers in the short term because competition will offer further alternatives.” Matkahuolto is owned by private bus and coach operators, to which it provides marketing, ticket sales and other services.

“Onnibus is operating alongside our services on National Road 5, where we and Koiviston Auto operate,” said Raimo O. Honkanen, Managing Director of Savonlinja. “The same applies to all main roads north from Helsinki. We have to adjust our position one way or the other.”

Koiviston Auto is halving its fares on the Helsinki—Kuopio route to €30 and the Helsinki—Lahti route to €10, below the price of an advance train ticket. “Train Z has seen our passenger numbers fall to one-fifth of record levels,” said Kari Hietaniemi from Koiviston Auto. “We’ll now see whether or not we can get any passengers back.”

As part of its new price regime, Koiviston Auto will also lower the prices of tickets purchased from drivers to the levels of tickets bought online in a bid to attract more passengers.

Mika Mäkilä, the managing director at the Finnish Bus and Coach Association, says that operators have yet to fully align their prices to the demand. “We’re getting closer to genuine competition where the nature of services is determined by the demand,” he said.

Competition effectively began with Onnibus’ foray into the public transport sector in 2012. The budget operator has declared its intention to double the scope of its operations this year. “You can expect us to expand aggressively,” said Pekka Möttö, Onnibus Managing Director. “We’ll launch new routes and increase our service frequency.”

The operator increased services between Helsinki and Turku, no more than a couple of days after a similar move by one of its main rivals on the route, Vainion Liikenne.

“I’d say that competition is generally very tough,” said Matti Vainio, Managing Director at Vainion Liikenne. “It looks like customers will benefit and prices stay [at their current levels] in the near future,”

All the managing directors seem confident that the popularity of bus and coach travel will grow as new routes are being launched and service frequencies increased. However, the constant changes in prices and routes may prove problematic for commuters.