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The rise and fall of Interregio. Extensive open-access passenger rail competition in Poland

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  • Król, Marcin
  • Taczanowski, Jakub
  • Kołoś, Arkadiusz

Abstract

Over the last few years there has been considerable interest in research into open-access passenger rail competition in Europe. However, the competition that existed in long-distance services in Poland between 2009 and 2015 has yet to be analysed. Surprisingly, there was fierce market rivalry between two state-owned enterprises answering to different levels of government: PKP Intercity (the central-government-run incumbent) and Przewozy Regionalne (a challenger owned by regional authorities). In comparison with the experience of other countries, this challenge was exceptional in terms of territorial reach and acquired market share (33%). In the polycentric Polish network, the challenger's services (branded under the name of Interregio) not only served up to 62% of all possible direct connections between the largest Polish cities, but also reached into more peripheral regional centres. Interestingly, we found no evidence of responsive price cutting in regular fares. In order to counteract aggressive low-cost entry, the incumbent opted for a differentiation strategy combined with a strategic use of political action. We found that although the incumbent's strategic behaviour did indeed contribute to the challenger's withdrawal from the market in 2015, its failure was mainly the result of a departure from the principal source of competitive advantage.

Suggested Citation

  • Król, Marcin & Taczanowski, Jakub & Kołoś, Arkadiusz, 2018. "The rise and fall of Interregio. Extensive open-access passenger rail competition in Poland," Research in Transportation Economics, Elsevier, vol. 72(C), pages 37-48.
    • Handle: RePEc:eee:retrec:v:72:y:2018:i:c:p:37-48
    DOI: 10.1016/j.retrec.2018.06.008
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    2. Ristić, Bojan & Stojadinović, Nikola & Trifunović, Dejan, 2022. "Conditions for effective on-track competition in the European passenger railway market: A yardstick for regulations," Transport Policy, Elsevier, vol. 119(C), pages 1-15.
    3. Jurkowski Wojciech & Smolarski Mateusz, 2021. "The influence of transport offer on passenger traffic in the railway transport system in a post-socialist country: case study of Poland," Bulletin of Geography. Socio-economic Series, Sciendo, vol. 53(53), pages 33-42, September.
    4. Patrice Bougette & Axel Gautier & Frédéric Marty, 2021. "Which access to which assets for an effective liberalization of the railway sector?," Competition and Regulation in Network Industries, , vol. 22(2), pages 87-110, June.
    5. Seidenglanz, Daniel & Taczanowski, Jakub & Król, Marcin & Horňák, Marcel & Nigrin, Tomáš, 2021. "Quo vadis, international long-distance railway services? Evidence from Central Europe," Journal of Transport Geography, Elsevier, vol. 92(C).
    6. Sandra Żukowska & Beata Chmiel & Marcin Połom, 2023. "The Smart Village Concept and Transport Exclusion of Rural Areas—A Case Study of a Village in Northern Poland," Land, MDPI, vol. 12(1), pages 1-23, January.

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    More about this item

    Keywords

    Open-access passenger rail competition; Long-distance passenger services; Railways; Passenger trains; Polish railways; Rail competition; Low-cost entry; Rail fares; Strategic behaviour; Raising rivals' costs; Strategic use of political action; Vertical market foreclosure; Business failure; Poland;
    All these keywords.

    JEL classification:

    • L11 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance - - - Production, Pricing, and Market Structure; Size Distribution of Firms
    • L51 - Industrial Organization - - Regulation and Industrial Policy - - - Economics of Regulation
    • L92 - Industrial Organization - - Industry Studies: Transportation and Utilities - - - Railroads and Other Surface Transportation

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