A new article, written in collaboration with Renato Redondi and Paolo Malighetti, from Bergamo University, is available for the Journal of Rail Transport Planning and Management.

Beria P., Redondi R., Malighetti P. (2016). The effect of open access competition on average rail prices. The case of Milan – Ancona. Journal of Rail Transport Planning & Management. In press.

In the paper we study the effect of Italo entry on the Milano – Ancona route, occurred in 2013. Comparing the prices of the 3 months before Italo’e entry with the following 12 months of head-on competition, we quantify both the effect in terms of reduction of Trenitalia prices and the price strategies of both players.
In particular:

1. Trenitalia reduced the prices of 15% on average (10 to 20% according to period and advanced purchase), corresponding to about 7€ per single ticket.
2. During the months of competition, Italo started being the cheapest operator, but became in the last months the price leader. This is probably due to the better market penetration and higher frequency of services.
3. In terms of prices dynamics, Italo tends to be the cheapest until the last week before departure, when is able to propose higher prices than the competitor.

It is interesting to notice that results are different from those observed on the Milano – Roma route. Here Italo has a pricing definitely more aggressive than Trenitalia, having a lower frequency of services and not enjoying the network effect with other trains.

The article is freely available until January 2017 at the following link:
https://authors.elsevier.com/a/1U0JM7sjssCOF8

Later on, the article article will be available to subscribers of the journal at the followig link:
http://www.sciencedirect.com/science/article/pii/S2210970616300488

If you are not subscribed, do not hesitate in contacting us for a personal copy.