Bus venture stifles competition, says report
24 Oct 06
Stagecoach and Citylink told to sell off services on Inverness and Aberdeen routes
A joint venture by two Scottish bus companies providing services between the central belt and the north could stifle competition, according to a ruling by the Competition Commission.
The Commission is requiring Stagecoach and Scottish Citylink to sell off some of their services between Glasgow/Edinburgh and Aberdeen/Inverness.
Under the arrangement, direct services run between Glasgow and Aberdeen, and between Edinburgh and Inverness, with passengers changing at the intersection point in Perth if necessary to reach their destination.
Following a reference by the Office of Fair Trading, the Commission has ruled that some services should be sold so that passengers do not lose out from the loss of competition which previously existed between the two companies.
Confirming provisional findings published in August, the chairman of the inquiry John Baillie said that when Stagecoach's low-cost Megabus service and Scottish Citylink were competing on these routes, passengers could take advantage of lower fares and a choice of operator.
"Following the joint venture, we have seen evidence of fares increasing more than costs on some routes.
“We consider that the best solution is to require the joint venture to sell certain of its megabus-branded or Scottish-Citylink-branded services to a suitable purchaser to restore competition.” A public consultation on this is to follow.
The report however found that another joint venture on the Glasgow-Edinburgh route had not had a negative impact on competition, as Stagecoach’s Motorvator service was likely to have been withdrawn otherwise.