Low-cost competition hurts Eurolines

Eurolines, the coach transport group owned by the Martin family and businessman Dragos Anastasiu, saw its revenues from international passenger transport go down by 13% in the first half, whilst this year?s figures mark the first negative performance since 2005.
Passenger transport services used to contribute 40% to the group?s turnover, but the weight could shrink to around 30% this year. The drop in turnover came amid competition from low-cost carriers, with companies such as Blue Air, Wizz Air and MyAir operating flights to Italy and Spain at similar prices.
“Long-distance routes are not the most comfortable, with competition from low-cost carriers being felt the strongest on this segment, so that we will shift to shorter distances, travel circuits or charters,” said Dragos Anastasiu.
“The last slump on this segment was registered in 2005. Last year was very good, but the cost of diesel oil has doubled since the start of the year and we may not generate profit. At the same time, the average income per passenger dropped by around 10% from last year and reached 90 euros”. This is how Anastasiu accounts for the H1 fall in turnover, given the number of passengers carried increased by 5% and reached 78,000 persons.
Eurolines is a major player on the market of road passenger transport, where Atlassib International also operates. The arrival of a rising number of low-cost carriers last year and a boom on the segment has hurt coach transportation.
Whereas in the year of EU integration both markets benefited from the elimination of visas, a high appetite for travel and improved living standards, as of this year excessive oil prices have affected both segments, whilst air travel has the advantage of providing shorter travel times.
The negative outlook for road passenger transport has caused Dragos Anastasiu to switch his business to tourism drawing into the group Mistral Tours and Martin Resort, two firms owned by the Martin family. In the wake of the deal sealed in July, the two firms were integrated into Touring Eurolines group – the group became a shareholder and holds 99% in Mistral Tours and Martin Resort.