Forty years’ experience of deregulated express coach services in Britain

Britain's domestic express coach system has operated since 1980 as a fully-deregulated network, with freedom of entry and exit, and no quantity or price controls. It was thus the first such case in Europe, followed by other examples of deregulation or liberalisation. This paper updates earlier studies of the initial impacts in Britain, and subsequent reviews of later developments. A strong dominance by larger groups can be seen, with significant market entry coming from other well-resourced groups, notably Megabus and Flixbus, rather than smaller operators. Factors behind their limited impact are examined. Despite competition, the largest operator, National Express, has seen growing profit margins in the last twenty years. Estimates are provided for market shares and revenue yield. The issue of potential excess profits is reviewed, in the light of evidence on cost structure and price elasticity, indicating that higher fares on routes without inter-operator competition are not necessarily due to this factor per se. In terms of product offered, the main changes appear to have been in use of e-commerce and pricing, rather than the physical coach service as such. Recent impacts of Covid-19 and entry of Flixbus are examined, along with other factors likely to influence performance.