Agenda

Development of long distance

Coach market

in case of Germany

APC- 10 year‘s anniversary meeting, Riga, 05. Septemer 2013

Situation

• Change of regulations in the beginning of year 2013

• Up to then, utmost protection of competition for railway by laws

• Only from and to Berlin significant services by coach

• Market share approx. 0.1 % of the total transport market

• 3 companies operated a network within Germany, some SME‘s operated airport transfers

• Since January, very dynamic development

Situation

The liberalization of the German long-distance coach services attracts a number of new stakeholders and companies

Active

Interested

• Market – including single lines operated by over 50 different coach suppliers

• There are various international companies, prepare the market entry or already have implemented

• After hesitation, the Deutsche Bahn AG as the current market leader interested at a further expansion in the Coach market

Situation

In a short time have formed highly competitive lines

Coach network – March 2013

Operators

Situation

Against the background of liberalization, the line network in the long-distancecoach traffic has greatly increased (2012: 40 routes, 08/2013: 160 routes),and will expand further

Structure National lines

Planned opening international lines Planned opening lines from 04/2013

Numbers of lines 03/2013

No Exact number

No Exact number

1) In cooperation with existing operators

Forecast

The forecasts for the market share of long-distance bus in Germany vary widely, a turnover of up to € 1 billion per annum possible

FORECASTING MARKET SHARE long-distance bus (BASE PKM)

Coach Coach

Plane Plane

Rail

Rail

Car

Car

Turnover Coach:

In addition to the fluctuating forecasted modal split shares isthe question of absolute market size

Forecast

OFFER, PRODUCT& PRICE

SALES & CUSTOMER SERVICE

PRODUCTION / OPERATIONS

Coach

TERMINALS

For Germany can be expected from a rapidly growing coach market, but also has the need for development.

Challanges for market development

Forecast

The growing distance coach traffic represents many challenges to market participants - but it also offers opportunities (1)

NETWORK PLANNING, MANAGEMENT AND PRODUCT PRICING

Opportunities

• Many large cities directly connected by highways• High Price level & capacity constraints at DB long-distance traffic• cooperation between operators - with common brand - with franchise models• cooperation rates, for example with airlines or transport associations• perfected yield management method

Challanges

• “tracking" attractive routes with connections other cities• differentiation from other coach operators• product positioning (low cost?, Standard? Premium?)• Optimal price level?• price reactions DB long-distance + DB Regio• entry of new competitors train

Forecast

The growing distance coach traffic represents many challenges to market participants - but it also offers opportunities (2)

SALES & CUSTOMER SERVICE

Opportunities

• High acceptance of Internet sales• Special search and booking platform• booking and yield management tools available on the market• sales cooperation, for example between coach operators, with Retail and with local public transport providers (including CityTicket connection)• Mobile sales and additional services

Challanges

• sales competition between coach operators (and also to Sales service)• Customer Information• conflict Customer vs. Low-cost structure• on-site customer support in case of failure• passenger rights

Forecast

The growing distance coach traffic represents many challenges to market participants - but it also offers opportunities (3)

PRODUCTION / OPERATIONS

Opportunities

• New Business Models for Service Providers• Central Coordinators as an interface between different operators and CCT• handling agents• Full range of coach companies• Nationwide manufacturer workshop network• collaborations with public transport providers, for example for workshop use or on-site operating personnel

Challanges

• Connections <> overall stability (high susceptibility to interference in cities and highway)• "major combat days" (start of the holidays, before Christmas, etc.)• decentrally parking of vehicles

• Accommodation staff• personnel scheduling: optimum between buffer and efficiency?• infrastructure availability and quality (see also next page)

Forecast

The growing distance coach traffic represents many challenges to market participants - but it also offers opportunities (4)

Terminals

Opportunities

• State of the art terminals, when municipalities implement new• PPPs or exclusively private investment: CCT as "shopping and service center with coaches “• Coach connection can promote accessibility and tourism• Cooperation between providers and local authorities (e.g. Marketing support)

Challanges

• Few real coach terminals are available in Germany• Financial needs of municipalities / responsibility open• Optimal location and affordable access for coach connection• Customer information (especially at unstaffed bus stations/terminals)• overload risk: Concentration of departures at certain times and days of the week• Limited Knowledge about conditions and needs for infrastructure in long-distance coach transport

Summary

The long-distance coach has shown in a short time many innovative approaches, yet still tackle some challenges.

OFFER, PRODUCT& PRICE

SALES & CUSTOMER SERVICE

PRODUCTION / OPERATIONS

Coach

TERMINALS

Active and flexible product management

Yield Management

Development of forms of distribution

Target group oriented marketing

Reliability even at peak times

Efficient (remote) control of the operation

Creation and funding of the necessary infrastructure

Marketing coaches towards cities

Link with other transport modes

Common marketing

coach and city

Summary

We expected in the medium time a significant growth. After that, it will give a phase of consolidation at the supplier, but also an adjustment of the value concepts

POTENTIAL MARKET STRUCTURE

Supply / network planning

Productmanagement & Pricing

Sales & Costumer services

Production & operation

Vihicles

Terminals / CCT / virtual stations

Main operators

Medium to long term:

4-6 companies

Specialists

Contact

14

Stefan Christian – PresidentRüdigerstr. 4610365 Berlin - GermanyEmail: Stefan.Christian@online.deTel. +49 (0) 151 27665212