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

Marcin Król, Jakub Taczanowski and Arkadiusz Kołoś

Research in Transportation Economics, 2018, vol. 72, issue C, 37-48

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.

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 (search for similar items in EconPapers)
JEL-codes: L11 L51 L92 (search for similar items in EconPapers)
Date: 2018
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (6)

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DOI: 10.1016/j.retrec.2018.06.008

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