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Stagecoach told to sell off services

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THE COMPETITION COMMISSION has concluded that the joint venture between Stagecoach and Scottish Citylink could lead to higher fares and reduced service levels for coach passengers on the Glasgow to Aberdeen and Edinburgh to Inverness routes where the two operators had previously been in competition.

It wants the joint venture to sell some of its services to an independent owner – a suggestion which has brought a warning from Stagecoach that this could jeopardise the future of Scotland’s intercity coach services.

The chairman of the Competition Commission’s inquiry, John Baillie, says: "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.

"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 adds that there is evidence of fares increasing more than costs on some routes. The Competition Commission is now consulting on options for divestment, and plans to conclude this before the end of the year.

Tom Wileman, managing director of the joint venture, says: "We are deeply concerned that the Competition Commission has chosen to split the Scottish Citylink and Megabus.com operations and enforce divestment of some services.

"The Competition Commission's decision runs a serious risk of jeopardising the future of inter-city coach services in Scotland. The proposal for yet more consultation will leave vital services in limbo, cause even further uncertainty for our passengers and add to the mounting unnecessary costs of this inquiry."

Wileman adds that the joint venture has improved services and created significant growth in passenger numbers, and comments: "In view of the small size of the Scottish Citylink joint venture, we are frustrated at the disproportionate amount of private and public sector time and money that has been spent on this inquiry, only to result in a worsening of services for the people of Scotland."

The joint venture was set up in September 2005.

www.competition-commission.org.uk
www.stagecoachgroup.com



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