18.08.17
CMA accepts fare caps on Exeter-London route due to ‘lack of competition’
Price caps will be imposed on unregulated fares between London and Exeter after the Competition and Markets Authority (CMA) raised concern about a lack of competition on services.
Last month, the CMA found problems with a lack of competition on the route, as FirstGroup MTR was awarded the South Western Franchise in March, meaning FirstGroup, who also run Great Western Railway (GWR), would have a stake in both routes down to the south west.
The CMA said that this could lead to problems for passengers with high fares and poor service due to a lack of competition.
Following this, FirstGroup and Hong Kong firm MTR were given an opportunity to suggest measures to ensure high standards were maintained for passengers, and today their suggestion of fare controls on the route have been accepted by the CMA.
Ticket prices will now be linked to those on a number of other comparable services to ensure they are kept in line with the market.
Both companies have also offered to maintain the availability of cheaper advance fares on both services, again by linking them with similar routes.
FirstGroup and MTR will be made to submit regular reports to the CMA to prove that they are complying with today’s agreement.
As the proposals have been accepted today, the award of the franchise will now go ahead without the deal progressing to a ‘phase 2’ investigation.
“We examined the proposals very thoroughly during the consultation period to ensure that they addressed all of our concerns,” said Rachel Merelie, executive director of Markets and Mergers.
“We believe that they will protect passengers from fares being pushed up due to lack of competition on this key route between London and Exeter.”
Today’s decision also follows the CMA clearing the award of the TPE franchise to FirstGroup last year as it found that competition on the route would not be negatively affected.
A spokesperson for FirstGroup also told RTM: "We are pleased with the CMA’s acceptance of our proposal to cap unregulated fares on the London to Exeter route, ahead of FirstGroup and MTR beginning to operate the franchise this weekend.”
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