Bletchleyite
Veteran Member
Reading the news of Flixbus entering the UK and doing so by charging very low, loss-leader fares in an attempt to see off Megabus/NatEx, it occurred to me that competition in the bus and coach industry almost always seems to be of this sort of type - basically muscling in with a large bank balance and burning a load of it to try to force the competitor to collapse or withdraw first.
Give or take the "value beans wars" of the 90s, this is not normally how competition in the retail or food industry works - when a competitor enters the market they might chuck in loss leaders to get people to try the new store, but rarely is this the whole basis of the competition. For instance, if McD's opens up next to Burger King they don't sell Big Macs for 50p until Burger King folds, rather they give some initial offers then rely on customers preferring their approach to the other's.
Why, I wonder, is this highly aggressive approach the norm in the bus and coach industry? Why do we rarely if ever see genuine competition, i.e. another operation coming in with a unique value proposition that is sustainable long term? (Edit: though I suppose you could argue that Megabus itself did do that because its pricing model is more airline-like than what NatEx was doing at the time).
Should we perhaps consider prohibiting this sort of "loss leader" competition as anticompetitive in law, as it is pretty much always of disbenefit to the customer in the long-term, because it just results in the same situation of a monopoly, just by a different operator?
Give or take the "value beans wars" of the 90s, this is not normally how competition in the retail or food industry works - when a competitor enters the market they might chuck in loss leaders to get people to try the new store, but rarely is this the whole basis of the competition. For instance, if McD's opens up next to Burger King they don't sell Big Macs for 50p until Burger King folds, rather they give some initial offers then rely on customers preferring their approach to the other's.
Why, I wonder, is this highly aggressive approach the norm in the bus and coach industry? Why do we rarely if ever see genuine competition, i.e. another operation coming in with a unique value proposition that is sustainable long term? (Edit: though I suppose you could argue that Megabus itself did do that because its pricing model is more airline-like than what NatEx was doing at the time).
Should we perhaps consider prohibiting this sort of "loss leader" competition as anticompetitive in law, as it is pretty much always of disbenefit to the customer in the long-term, because it just results in the same situation of a monopoly, just by a different operator?
Last edited: