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Stagecoach competition response

 

Winning bidder responds to concerns about award of new East Coast franchise

Stagecoach has responded to the Competition and Markets Authority (CMA) investigation into the new East Coast franchise award by providing undertakings which relate to the two areas of concern identified by the CMA.

The CMA raised concerns that the award of the franchise to Virgin/Stagecoach consortium Inter City Railways Ltd (ICRL) may be anti-competitive at two locations along the route, potentially leading to ‘higher fares or reduced service quality for rail passengers’.

One issue is between Peterborough and Grantham, where Stagecoach-owned East Midlands Trains provides the only competing rail service and there is a ‘minimal’ coach service. Stagecoach has committed to a price cap on certain EMT fares and says it will provide for the ongoing monitoring of these fares by the CMA.

On routes from Edinburgh to Dundee and Aberdeen, the CMA raised concern about overlap with Citylink coach services, which are operated and part-owned by Stagecoach. The company says it ‘will not take decisions which may impact the competitiveness of the coach services’ in relations to fares, timetables, frequency and service quality.

The CMA is now considering the undertakings offered by Stagecoach and will decide by 21 April whether to accept them (or a modified version of them). This will include a public consultation on the matter. If the undertakings are not accepted, the acquisition by ICRL will be referred for a more in-depth phase 2 investigation.

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