While in other European countries the long distance bus transportation system from one city to another is booming, such opportunity is given in Germany only on a limited amount of routes. Reason for this is a decade-old law. However, the envisaged liberalization of the law on passenger transportation might lead to a change and give new opportunities to German and foreign bus companies.

In accordance with the current wording of § 13 sec. 2 no. 2 of the law on passenger transportation, the approval for a regular scheduled service with motor vehicles has to be prohibited by the competent public authority, if by such means the transportation system or the interest therein would be affected. This would be the case in particular if the needs for transportation can also be served by currently existing transportation vehicles or the envisaged transportation can be fulfilled - without a major improvement of services - by the already existing companies or railways.

In summary, § 13 sec. 2 no. 2 of the law and passenger transportation says that new regular scheduled services on long-distances can only be established if they do not form a competition to already existing railways and bus routes. Since Germany has a very well developed railway system, which connects all biggest cities and agglomerated areas, the aforementioned provision in practice results in a very restricted development for long-distance bus transportation systems in Germany, in particular compared to other European countries. The existing long-distance bus transportation systems are mostly international services, with which almost all European countries can be reached and which are prohibited from the transportation services in Germany. An exception for historical reasons is the transportation system in Berlin. During the German separation Berlin jointly with Hamburg and several other German cities developed a long-distance bus transportation system, which still exists, for the simple reason that there had not been enough connections

between western Germany and Berlin. In particular the route between Berlin and Hamburg becomes more and more attractive, not only due to the high and repeatedly rising prices of the long-distance railway system in Germany.

A change in the existing legal position was blocked over a long period of time. The few bus companies, having a license for long-distance transportation and the formally state-owned monopolist Deutsche Bahn AG are afraid of competition and the German government, who still owns the meanwhile privatized Deutsche Bahn AG, is not at all interested in devaluating the company by admitting competition. However in recent years the opinion grows that regular scheduled buses between major cities would be a cheap and environment-friendly alternative to railway system. Those people demanded a change in the law on passenger transportation. Further developments came with a judgment by the Federal Administrative Court on 24th June 2010 (court file 3 C 14/09), according to which a regular scheduled transportation with buses is to be approved, even if the route is already served by the Deutsche Bahn AG, if the ticket prices of a bus service are significantly cheaper than the corresponding railway prices. In the coalition contract between the CDU/CSU and the FDP (the current government main body), dated 26th October 2009, it was approved that a long-distance bus transportation system has to be granted and that § 13 of the law on passenger transportation must be changed for this reason. Following this, the Federal Minister for transportation, Peter Ramsauer, announced in an interview, given to a Hamburger newspaper, Hamburger Abendblatt, on 15th January 2011, the admittance of regular scheduled long-distance buses in Germany and the preparation of the therefore necessary legal basis. If the Federal Minister for transportation fulfills his announcement and further German regular scheduled bus routes are admitted, this could give a chance to German and foreign bus companies, providing they have positioned themselves in the market on time. According to a study by the technical university of Dresden from December 2008, the need of an expansion of regular scheduled long-distance bus routes exists. The study estimates that long-distance bus transportation might came up to a minimum of 5 % on routes of 300 km of market shares and therefore the study comes to the following conclusion: From an overall economic perspective, a long-distance regular scheduled bus transportation is the best choice available in transportation vehicles, since it has be lowest external costs compared to other long-distance transportation vehicles. Also the internal costs are lower when going by bus than with any other long-distance transportation vehicles. While the Deutsche Bahn AG mostly attracts service orientated passengers for whom a short travel time is very important, a long-distance travelling by bus would mainly attract price sensible travelers for whom a short travel time is not that important. A long-distance regular scheduled bus transportation system therefore has a high passenger potential.

Contact Person: Damian Wypior, Esq., This e-mail address is being protected from spambots. You need JavaScript enabled to view it