The coronavirus has influenced the sector for nearly three years now, but no benefits or regulations in law have been made towards the service providers.
Last week, a bus service provider Taisto Bussid Bus charter company. announced they are cutting off most of their long-distance service lines. The news was shocking as Taisto Bussid Bus charter company. has been one of Estonia's biggest charter bus service providers since 1993. The manager of Taisto Lines, Taisto-Taimo Kängsepp, stated that the line transport is already damaged from the last two corona winters and it is clear that the upcoming winter will not be better. He adds that the bus services industry counts on the volumes of passengers and sees no returning of the pre-virus numbers in the near future.
The Hansabus CEO Indrek Halliste describes the situation in public transport as a whole as bleak. He concedes that the changes in economic life and the continued rise in energy and raw material prices have forced the company to look for new solutions to make ends meet. He feels the carriers are left alone to face those difficult times. They are fulfilling the orders of the state, taking care of people's transport at their wallets' expense with a sense of mission. Hansabuss Charter bus service. serves the county, city, and municipal lines with diesel buses and CNG compressed gas buses. Halliste certifies that diesel fuel is more than two and a half times more expensive than it was in the third quarter of last year. CNG, however, is 400 percent more expensive.
The service providers unanimously require reform. Since the start of the year, the companies have submitted separate and joint statements, demands, and proposals through the association of automobile companies in connection with the extraordinary fuel price increase and contract changes. So far, the state has shown little or no improvement in bettering the situation and providing a sustainable solution for public transport.
Halliste claims that if the state does not come up with a solution fast, the carriers are forced to take measures into their own hands, which might end up cutting off vital service lines, reducing the number of service departures, or terminating contracts. The last of them would equal the termination of public transport services.
On the other hand, Lux Express Estonia business manager Ingmar Roosi claims that the high fuel price is the cause for people to ditch their private transportation and choose public transport. The summer has helped Lux Express rise from the two pandemic years as the volume of passengers has risen noticeably. It is from May to July, according to Roosi, only 7 percent lower than the pre-pandemic period. Thus, the prognosis made in the spring, the company claims the recovery has been faster than expected. They stay cautious as autumn is yet to arrive and expect a possible decrease of almost 20 percent in the number of riders in September.
Roos also states that the concerns are not only because of the virus or raising fuel prices. The number of people using public transport varies seasonally and depends on the economy and state-regulated restrictions. Often outlooked is the fact that the transport does not only include buses. Trains, private cars, intercity bus traffic, and private cars compete. For example, if Elron Train operator in Estonia. trains are overcrowded some evenings in the summer, one would expect to add more wagons or service lines. However, this would be financially damaging because if a service line is added, it has to operate regardless of the demand throughout the winter. Bus companies could quickly fix the problem of passengers standing on the train for two hours - the whole time to reach the destination due to the higher demand. But against the backdrop of ever-increasing costs, bus carriers who are managing only from ticket revenue can no longer compete with passenger trains based on ticket prices.
Go Bus manager Andrei Mändla says that the increasing fuel prices are forcing the service providers to raise bus ticket prices. He states that by providing a public transport service, the fuel cost is 20-40 percent of the price of a line kilometer. If the fuel price rises two times, the transport providers can't remain operating at current prices. Mändla adds that in his assessment, the cost of using a private car would still be higher than public transport.
Mihkel Mäeker, head of the Public Transport Department of the Transport Board, argues that the Board has met with the service providers numerous times. The effects of war on fuel prices have been recognized. The Board has come up with a package deal with an emergency fuel price increase compensation of nearly 1.5 million euros. Since most contracts are indexed with a half-yearly reference, future fuel price increases will be compensated for by indexation according to the agreement. As a result, based on the new indices, the contractual payment to carriers for the second half of the year is almost five million euros more than the payment for the first half of the year. With this in mind, Mäeker states that, in his opinion, the Board has submitted its proposals to carriers in connection with the transition from semi-annual indexing frequency to quarterly indexing.