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Stagecoach pledges EMT fares cap to address East Coast competition concerns

Stagecoach has said it will cap some East Midlands Trains fares and stay away from direct commercial input in its Citylink coach business to try to address competition concerns in relation to the award of the East Coast rail franchise.

On 6 February the Competition and Markets Authority (CMA) announced that the award of the franchise to the consortium of Stagecoach and Virgin Trains may need further investigation in case a lack of competition harmed the interests of passengers.

It was specifically concerned with the overlap of East Coast with some East Midlands Trains services, operated by Stagecoach, between Peterborough and Grantham and between Peterborough and Lincoln. The overlap of East Coast with coach services operated by Citylink between Edinburgh and Dundee as well as between Edinburgh and Aberdeen was also an issue. Stagecoach holds a 35% interest in Citylink.

The undertakings offered by Stagecoach in relation to the rail journeys commit it to a price cap on certain fares set by East Midlands Trains (EMT) and provide for the ongoing monitoring of such rail fares by the CMA.

In relation to the Citylink coach services, Stagecoach has proposed that it will not take any decisions regarding fares, timetables, frequency or service quality, as they may impact the competitiveness of the coach services as against East Coast.

The CMA has decided that there are “reasonable grounds for believing that the undertakings offered by Stagecoach, or a modified version of them, might be accepted in lieu of a reference to a more detailed phase 2 merger investigation”.

The CMA now has until 21 April to consider whether to accept the undertakings, or a modified version of them.

As part of this consideration process a public consultation on whether the proposed undertakings will be held.

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