Competition Commission asks Stagecoach and Scottish Citylink to sell some services |
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Published
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Mon, 23 Oct 2006 10:45
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LONDON - The UK Competition Commission (CC) has ruled that the joint venture between Stagecoach Group PLC and Scottish Citylink will only be allowed to go ahead if the firms sell off some services to an independent owner.
The Commission ruled that the venture has the potential to increase fares and reduce the frequency of services to the passengers traversing the Glasgow-Aberdeen and Edinburgh-Inverness routes. The Commission also said that it was necessary to sell some services to ensure that passengers were not left stranded as a result of loss of competition between the erstwhile rivals.
"Customers benefit from competition and we do not see how this joint venture can preserve these benefits for passengers when previously these companies had been competing vigorously for their custom," said John Baillie of the Competition Commission.
Perth-based Stagecoach operates one of the largest services in the UK and its merger with Scottish Citylink had aroused competition concerns, which were addressed to the Competition Commission. "When Stagecoach's low-cost megabus service and Scottish Citylink had been competing on these routes, passengers could take advantage of the lower fares and the choice of operator that resulted," Baillie said.
However the merger had nixed this alternative for the passengers, he added. The Office of Fair Trading had referred the joint venture to the CC in March. These new rulings follow the provisional report released in August.
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