If so far subsidiaries of Hugo Osula’s Mootor Grupp have held the monopoly on Tallinn-Tartu coach lines, Tiit Pruuli’s Go Grupp is the next domestic firm to try and compete by launching 15 daily departures from tomorrow.
“The situation that has ruled the Estonian coach business for as long as anyone can remember will change from November 1,” member of the supervisory board of Go Grupp and its subsidiary GoBus, Tiit Pruuli, said yesterday.
Cost at €2 million
The T-pilet ticket sales system reveals that Mootor Grupp companies Lux Express and Eesti Buss hold 29 departures between Tallinn and Tartu, or two-thirds of all daytime trips. Taisto Liinid operates three departures, while several smaller companies run one or two trips a day.
“Two years ago, the public transportation act changed in a way to make it possible for other carriers to partake in the market,” Pruuli said. The businessman is determined to dismantle Mootor Grupp’s monopoly on the popular connection.
GoBus procured seven new Scania Touring buses earlier in the year, with the total investment coming to €7 million. “The chassis of the bus was made in China. Next, they were shipped to Europe and put together in Germany,” said CBDO of GoBus Kaur Sarv.
The buses seat 53 passengers each and give work to 23 bus drivers. GoBus is hoping for 60 percent capacity initially. The company’s first coach will depart at 6.45 a.m. and the last one at 8.45 p.m.
“When we started working on our business plan, we decided not to aim for the sweetest departure times where profits are biggest or limit ourselves to a few buses. We decided to go for it full time,” Sarv said. GoBus makes request stops at Adavere, Puhu rist, Pikknurme, and Paia.
The company’s decision may have been influenced by the new line permits process that took effect in 2015 that favors companies offering daily departures, new buses, and more frequent stops.
Launching Tallinn-Tartu trips is the first major step for GoBus on the long-distance line market. “These buses we have here are meant for the Tartu line,” Sarv said. He added that launching a major long-distance line is always a project in itself.
Competition slashes prices
“Looking to St. Petersburg and Riga, why not Narva or Pärnu, we would have to think things through again and see where and how it would pay,” Sarv said. It would also require new buses.
Andrus Treier, head of Mootor Grupp subsidiary Lux Express told BNS last Wednesday that GoBus’ move means the company, that has been servicing nearly half the daily departures between Tallinn and Tartu (22), must revise its recent price policy.
Lux Express sent its clients a newsletter the very next day, saying it has lowered the price of its luxury class ticket from €15 to €9.
Tickets will initially cost €6-8 in GoBus’ Tartu buses. Asked whether the company has launched a price war, Pruuli said that there is definitely room for price adjustment on the Tallinn-Tartu line.
“The recent de facto monopoly can no longer take advantage of its position, that much is clear.” Pruuli added, however, that it is not the place for price dumping. “The competition board will make sure of that.”
While Äripäev wrote in spring that Deutsche Bahn subsidiary Arriva might be interested in acquiring GoBus, Pruuli told Postimees the company is not for sale. He did not rule out the company moving under the wing of a foreign investor.