Clearance of award of South Western franchise to Stagecoach

OFT decision (19 pages, PDF) clearing the award of the South Western franchise (South West Trains and Island Line) to Stagecoach.

The main relevant overlaps were with Megabus, where National Express was deemed to provide effective competition anyway, and with local bus services, where the OFT found insufficient evidence of substitutability or considered that bus fares were constrained by tenders and other factors, making potential competition with South West Trains irrelevant.

The paper notes the difficulty of communicating the special counterfactual applicable under the GB passenger rail franchise merger control rules (analysed in this Reckon paper) to consultees:

Despite explaining the unique nature of the counterfactual in our questions to third parties, many suggested that the acquisition would not materially change competition in the area given Stagecoach was the incumbent operator.

For further information or advice please contact Franck Latrémolière.

Filed under Merger control, OFT, Public transport.

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