The Fehmarn Belt duopoly – Can the ferry compete with a tunnel?
The Fehmarn Belt duopoly – Can the ferry compete with a tunnel?
- New search for: Aigner, Rafael
- New search for: Weber, Katharina
- New search for: Aigner, Rafael
- New search for: Weber, Katharina
HighlightsWe analyse future competition of a ferry and a planned tunnel on the Fehmarn Belt, a strait between Denmark and Germany.Our theoretical and empirical analysis indicates that the ferry might stay in the market.If the ferry stays, the planned Fehmarn Belt tunnel will not be profitable.
AbstractThe Fehmarn Belt is a strait between Denmark and Germany, currently served by a ferry operator. We analyse competition between the ferry service and a planned tunnel, the Fehmarn Belt Fixed Link. We develop a differentiated duopoly model to address two questions: 1. Will the tunnel induce the ferry to exit the market once it operates? 2. Will the tunnel’s toll revenue suffice to cover its cost? Using real-world data and traffic forecasts, we show that it should not be taken for granted that the ferry will exit the market, and that if the ferry competes, the tunnel project will make a loss.
Document information
The Fehmarn Belt duopoly – Can the ferry compete with a tunnel?
Transportation Research Part A: Policy and Practice ; 100 ; 1-15
2017-03-15
15 pages
Article (Journal)
Electronic Resource
English
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