Cost developments in the Norwegian bus market - Causes and effects

The Norwegian bus market has experienced a rapid increase in cost levels during the period from 2019 to 2025. This report examines the causes of the observed cost growth. Our findings indicate that the main drivers are the rising cost of key input factors, such as labour, equipment, and maintenance services, which have grown beyond the general rate of inflation. At the same time, changes in both the quality and structure of the service have impacted costs. This includes the transition to electric buses and increased infrastructure requirements. Increased contractual details in public tenders and stricter enforcement of malus payments have reduced operators’ flexibility and leading to higher costs. Finally, characteristics of the supplier market for buses and the rise in sickness absence among bus drivers have also contributed to cost pressures in the bus sector.