Disadvantaged by climate plans ?: Flixbus wants to sue federal government

              Wednesday, November 13, 2019

              The climate package of the Federal Government plans to lower the ticket prices for long-distance traffic of the German Railways. A lower VAT rate is planned. Prices for long-distance buses would be outside. Flixbus feels therefore disadvantaged and wants to move before the Federal Constitutional Court.
              Is the Federal Government's planned VAT reduction on train tickets right? Flixbus doubts that and sees himself disadvantaged by the climate plans of the federal government. To counteract this, the coach company has announced a lawsuit to the Federal Constitutional Court. It also considered a complaint to the European Commission, as co-founder André Schwämmlein said. For this, Flixbus has had a legal opinion drawn up, which examines the planned VAT reduction for long-distance rail traffic. "We are convinced that a unilateral VAT reduction for the railways, ie without taking into account the greener bus, is not legally allowed," said Schwämmlein. The Federal Government had agreed in the climate package a VAT reduction for rail transport. From January on long-distance railway tickets as well as in local traffic and only seven percent VAT will be due. So far, it was 19 percent. Deutsche Bahn has announced that this benefit will be passed on to customers in full. This would make tickets a good ten percent cheaper. This should bring more citizens to switch from the car or the plane to the train. The bus service is not mentioned in the climate package, however. But the legal opinion rates Deutsche Bahn and Flixbus as equal competitors. The "principle of fiscal neutrality enshrined in EU law requires the equal treatment of competing services and, to that extent, the equal treatment of performing businesses", it states. "These requirements also apply to the provision of reduced rates, inter alia in the case of transport services." The Confederation rejects this view: "The Federal Government sees rail transport as having the greatest potential for securing a climate-neutral mobility of citizens in the future," the Finance Ministry said on request. "The bill is compatible with the requirements of constitutional law and EU law." Flixbus fears rising price pressureSchwleinlein feared by the reduction of VAT in long-distance transport, however, significant disadvantages for his company. Many long-distance bus routes, especially in rural areas, are in danger because prices for Deutsche Bahn could keep pace there in the future. "Especially at the discount prices of the Deutsche Bahn, many customers will look closely, if they are even cheaper, and maybe say: 'I drive ICE'," he said. If the railways reduce their prices, Flixbus must move down in price. "And that means that I have to evaporate my network, because my costs remain the same," said Schwämmlein.Etwa 30 percent of the long-distance bus network would then have to be limited, had already threatened in the weeks before Flixbus repeatedly. "That means clocks will be reduced on more busy routes." Where Flixbus is only one, two times a day on the road, routes should be completely deleted. However, these measures would not be available until the summer of next year or even the following year, emphasized Schwämmlein. The Federal Government had liberalized the long-distance bus market in 2013 – among others, in order to increase competition for Deutsche Bahn. Numerous providers were launched, but now Flixbus dominates the market with a share of around 95 percent. Under the Flixtrain brand, the company is also active in rail long-distance transport – and there the only competitor of Deutsche Bahn. "We write thin margins in the bus business, but at least margins, with which we can build Flixtrain and invest in alternative propulsion", said Sponge. Should more losses be incurred in the long-distance bus business, these investments are in danger. Lawsuit and complaint will submit Flixbus as soon as the law enters into force in the current form.

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