Sun, Aug 13, 2017 - Page 7 News List

Macron’s first stab at reforming French economy is rolling along

The French president’s measure allowing bus companies to compete with the national railroad has French businesses hoping for further deregulation

By Ania Nussbaum  /  Bloomberg

Still, the turbulence that Macron unleashed, leading to “the birth and death of new companies,” is a normal sign of free market competition, Toulouse School of Economics professor Marc Ivaldi said. “As for whether this will be a symbol of Emmanuel Macron’s approach, I don’t know.”

The largest and only private bus operator is Flixbus, which is based in Munich and was founded in 2013 when Germany deregulated its own market. Next is Ouibus, owned by SNCF, and third is Isilines, a unit of Transdev, which is controlled by state holding company Caisse des Depots et Consignations.

Flixbus and Isilines say they expect to be profitable next year, and Ouibus in 2019. To make that happen, they have been raising prices, and further increases are likely. Flixbus and Isilines do not own their own fleets, but rather provide booking and after-sale services and work with local bus companies.

“It’s a weak margin business,” Flixbus France head Yvan Lefranc-Morin said. “Overall, we are very satisfied that the market developed so quickly.”

Bookings increased 80 percent in the first half of this year, he said.

“I hope Macron’s future reforms will be driven by the same philosophy and really open the markets,” Lefranc-Morin said.

Recent actions by the government have cast doubt on how far Macron will go in liberalizing the economy and breaking with France’s tradition of dirigisme.

The new president twisted the arms of automakers PSA Group and Renault SA to save a struggling autoparts maker and decided to nationalize the 155-year-old STX France shipyard, at least temporarily, to prevent Italy from gaining control.

If the bus reform is any indication of the future, Macron’s changes might be more piecemeal than sweeping.

“He’s understood that France is ready for reforms, but that it should be done in a homeopathic dose rather than electroshock,” Subran said.

Thiebaut and her fellow bus passengers are not in a rush. The ride to Reims — with air conditioning, reclining seats and Wi-Fi — took about two hours, compared with 50 minutes by rail. Although buses are often half empty, this one was packed.

“It’s a good deal and I’ve met interesting people,” she said.

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