Friday, July 22, 2011

Long Distance Coaches From Riga

Long distance coaches are rather developed and popular mode of passenger transportation in the Baltic States. Last year I wrote how coaches dominate the public transport market within Baltic States so now it’s time to look what are the possibilities for travel from Riga to destinations beyond borders of Latvia, Lithuania and Estonia. There also are several long distance coach routes not involving Riga but these are not taken into account here.

Altogether 131 unique cities and towns outside the Baltic States can be identified with direct service from Riga. As the map shows – all routes can be divided in two large groups based on their geography:
1) The closest destinations – Russia (excluding Moscow), Belarus and northern part of Poland. This group includes frequent services to the large cities as Warsaw, St Petersburg and Minsk and far less frequent services to regional destinations like Gomel and Baranavichy in Belarus or Velikiy Novgorod and Smolensk in Russia. Services in this group see competition from car travel and in lesser extent from air travel (limited number of destinations focused on feeding Riga hub) and trains (service being limited to St Petersburg, Minsk and few more stops on the way). Routes in this group have many stops in the Baltic States and further abroad and they are operated by various companies often strongly cooperating and, in some occasions, competing.  
2) Routes to more distant destinations in Ukraine, Germany, Netherlands, Belgium, Russia (Moscow) and other countries. All of them (except few in Ukraine) are operated by carrier Norma-A under Ecolines brand. These routes face strong competition from airlines (airBaltic and Ryanair) that outperform Ecolines by frequency and seat capacity, and of course – by travel time.

Nevertheless there are reasons why some costumers choose 31-hour bus ride instead of less than 3-hour flight to Düsseldorf. First of all - coaches serve many more cities and towns than air travel can offer. Almost all of West-heading coaches from Riga make a detour to pick more passengers at Vilnius and stop at all mayor towns all the way to Warsaw. In Germany and the Netherlands coaches stop at large number of medium-sized towns. So being closer to the origin and destination of passenger is a cornerstone in this service. This positively effects the overall travel costs as ground transport in Germany is monopolized and expensive.
Secondly, coach travel is generally cheaper than air travel for close departure bookings, yet directly comparison is hard as airlines use fare level system and extensive sales but Eurolines – flat fares. In the example of Düsseldorf, flat Eurolines fare of 110 is undercut by airBaltic for travel 7-8 weeks from today and by Ryanair – within a week from today. As Ryanair has recently restricted online bookings for travels from Latvia and Lithuania for departures within a week due to credit card fraud risk, choosing a coach is an alternative also in urgent cases.
And the last, but not the least reason is luggage allowance. While charging for checked-in luggage is a mayor revenue source for almost all airlines operating from Riga, Eurolines don’t charge for luggage at all and the luggage size regulations are less strict. This is a large travel cost saver for those passengers intending for a longer stay – guest workers and students for example.
Passengers loading luggage for their trip from Riga to Kiev at Riga coach station. Operated by Ukrlines under Ecolines brand. The 50 service is popular despite the more than 16-hour ride and need of Belorussian transit visa.  
Norma-A has publicly admitted that after the opening of German labor market their sales has strongly increased and some capacity will be added. But what are other development opportunities in the market? As top priority for Ecolines I see more complicated fare system that guaranties lower fare than air travel also for more distant departure dates and allows benefit from elements of yield management. If the number of departures is going to increase - the number of destinations per route should be decreased to reduce the travel times (similar to current route to Paris that skip all German destinations). The role of frequency seems to less important in this type of service, though I believe no destination should be served less than twice weekly anyway. If the market grows, different route structure of developed transfer opportunities and high route frequencies may be applied. From one side - long distance coach market is strongly linked to situation in air travel so increased airfares must increase the passenger number for bus travels, but from the other side - many of the potential passengers may choose not to travel at all because of the unacceptable travel time by coach or choose to make the journey by car to benefit from grater flexibility. 

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