The conflict between competition policy and the wider role of the local bus industry in Britain

Since the Transport Act of 1985, the local bus industry in Britain (outside London and Northern Ireland) has been subject to deregulation, removing previous restrictions on routes, service levels and fares. This also marked a reversal of the previous emphasis on co-ordination of services provided by different operators, and introduced competition law as applying to other industries to the local bus sector. This has been in conflict with other policy objectives aimed at stimulating greater use of public transport, such as harmonisation of ticketing systems. The underlying issues are examined, and recent changes in policy. The Local Transport Act of 2008 offers an opportunity to resolve some of these problems, and its application in Oxford is discussed as the first substantial example to date. However, a strong conflict remains between the role of competition agencies and other aspects of policy.     

Spoke airports,intentional and unintentional ground travel,and the air travel decision-making process

For air travelers originating from the spokes of the US hub-and-spoke air network, price, flight frequency, and aircraft type are all known factors in their travel decision-making process. Less well known, however, is the extent to which different elements of ground travel enter into these travelers’ air journeys. Based on 51 interviews at four universities at spokes surrounding O’Hare International Airport, this article describes how considerations such as vehicle availability, individual driving ability, localized weather, and unanticipated ground travel are fundamentally part of the air travel decision-making process for spoke travelers.     

Hub location in the South-Atlantic airline market: A spatial competition game

The paper analyzes the airlines’ hub location problem through a spatial competition game played in two stages. First, airlines sequentially choose the location of their hub and second, they compete offering direct or connecting services between each city-pair. Different outcomes in the first stage will affect competition in the second, and as a consequence, the market share that airlines can obtain.Given actual demand patterns, results of the model are applied to the South-Atlantic airline market. We study the subgame perfect equilibriums obtained as a result of competition in each city-pair to anticipate where airlines will probably locate their hubs once an “open skies” policy is adopted in this market.     

Ten years after bus deregulation in Japan: An analysis of institutional changes and cost efficiency

The local bus market in Japan was deregulated in 2002. This study examines the impact of this deregulation on the market structure and the operators' cost efficiency over the last ten years. First, we perform a qualitative before-and-after-deregulation analysis of Japan's bus market, finding that there has been little change in the structure of the Japanese bus market so far. Second, we investigate the effectiveness of the deregulation and internal organisational factors by using a dataset of publicly owned (municipal) bus companies. We estimate the total cost frontier functions in order to examine their effects, showing that it is the internal organisational factors (i.e. governance structure) that affect the operator's efficiency, not deregulation. In fact, the coefficient of subsidies to companies is positive, with statistical significance, thereby suggesting that cost efficiency decreases as the subsidy ratio increases. The coefficient of the contracting-out (MCGL) dummy also obtains statistically significant results; thus, we provide an account of how contracting out clearly improves operators' cost efficiency. The deregulation variable did not show significant results.