RegioJet complains about Flixbus pricing

The Czech bus company has gone to the European Commission

Czech bus and train company RegioJet has complained to the European Commission about alleged underpricing by competitor Flixbus. The complaint was sent to European Commissioner Margrethe Vestager, responsible for competition.

At the same time, RegioJet has sent a pre-litigation letter to Flixbus asking it to increase prices.

“More than nine months after entering the market, Flixbus runs at prices that cover only 55 percent of the cost. This is unfair competition aimed at controlling the market and harming the business of other carriers on the market,” RegioJet said in a press release.

RegioJet in known for its yellow buses while German-based competitor Flixbus had green ones.

RegioJet at the beginning of the year accused its green competitor of predatory behavior in the market and said it was preparing a lawsuit. If Flixbus does not respond to the request to raise prices, then RegioJet will go ahead with the lawsuit.

Brno businessman Radim Jančura, who owns RegioJet, said that Flixbus does not intend to compete with local carriers in the Czech Republic, but instead has planned to take over local competitors from the very beginning.

Jančura said that when Flixbus entered the Czech market, the German company offed to let Regiojet become part of its network and pay them a percentage from every ticket sold.

Jančura adds that Flixbus had the right to sell tickets for prices not covering their operating costs for two or three months after entering the market. This would be long enough for riders to try the competition and decide which carrier to use.

The estimate that Flixbus runs at prices covering approximately half the cost is based on an analysis made by RegioJet. On lines from Prague to Brno, Plzeň, Liberec, Český Krumlov and Karlovy Vary the cost per kilometer is about Kč 0.35, while on routes where it has a monopoly it is double or triple that, RegioJet claims.

Since 2015, RegioJet has been a brand of bus transport operated by Student Agency. There is also a train service run since 2009 by the Student agency called RegioJet. The name Student Agency was dropped for buses as people do not need to be students to use them. Student Agency was founded in 1996.

Flixbus was established in 2013 when the German transportation system was liberalized. Flixbus entered the Czech market in 2016 with routes from several Czech cities to international destinations. It introduced domestic routes within the Czech Republic in August 2017.

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