Diesel costs force Finnish bus companies to cut services

Rising diesel costs have forced some Finnish bus services to stop, Yle reported, as operators assess whether routes remain viable when ticket revenue does not cover expenses.

Eastern Finland-based family company Savonlinja will end weekend services between Kajaani and Iisalmi, and between Kajaani and Kuopio, on October 21. The company also cut services last summer on routes between Joensuu and Lappeenranta, and Joensuu and Jyväskylä, its director of business operations, Jukka Komulainen, told the Finnish News Agency STT.

Competition has prevented the company from raising fares. On the competitive Joensuu to Kuopio route, Savonlinja has even lowered prices, Komulainen said. Diesel has risen by more than 70 cents per litre in the past year. The company uses two million litres annually, and diesel has cost more than 2.4 euros per litre in recent days.

Koiviston Auto, Finland’s largest bus company, and Onnibus, which belongs to the same group, have not yet had to cancel services because of diesel prices, said Koiviston Auto business director Joona Hurmerinta. The companies are continually assessing whether all services can continue. Higher diesel costs have significantly affected profitability, although strong sales at Onnibus have helped. Fares have risen on some routes and at some travel times, while student discounts have recently been introduced for multi-journey and season tickets.

A significant share of services operated by both companies are contracted services, subsidised by the state or municipalities under agreements with bus companies. Komulainen said the financial pressure could be eased if the Finnish Transport and Communications Agency, Traficom, reassessed whether support for services between municipal centres should increase because of higher diesel prices.

Mika Mäkilä, chief executive of the Finnish Bus and Coach Association, said he understood that the government’s options were limited. He said temporary direct support for companies that use large amounts of diesel, similar to a scheme used during the Covid period, could provide faster help than tax measures.