CMA raises concerns over East Coast rail franchise

ICRL, a subsidiary jointly owned by Stagecoach and Virgin Trains, is due to take over the East Coast franchise on March 1. Picture: PA

ICRL, a subsidiary jointly owned by Stagecoach and Virgin Trains, is due to take over the East Coast franchise on March 1. Picture: PA

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NEW East Coast train operator Stagecoach will have to pledge not to raise fares or cut services after the Competition and Markets Authority (CMA) raised concerns that it also runs CityLink coaches between Aberdeen, Dundee and Edinburgh.

The CMA order comes three weeks before a 90 per cent Stagecoach-owned partnership with Virgin takes over passenger trains between Aberdeen and London via Edinburgh.

East Coast currently offers some cheaper fares than ScotRail between Aberdeen and Edinburgh, although it only runs four trains a day on the route compared to 13 by ScotRail.

East Coast’s anytime single fares are almost one fifth cheaper at £29 compared to £34.40 on ScotRail.

CrossCountry also operates train on the line.

The CMA said there was a “realistic prospect” the Stagecoach takeover would lead to higher rail fares or reduced service quality, and “may result” in higher coach fares and fewer services.

The authority also raised concerns that Stagecoach would have a monopoly of passenger trains between Peterborough and both Grantham and Lincoln, since it also runs East Midland Trains.

However, it said it had “no significant competition concerns” that Stagecoach and Virgin already run Scotland-London trains on the west coast main line.

The authority said airlines provided “significant rivalry” to both.

The CMA said Stagecoach had five days to offer “undertakings” to address the competition concerns, which would avoid a more detailed investigation.

A Stagecoach spokesman said: “Our objective is to grow the number of passengers using Virgin Trains East Coast services.

“Offering very good value fares, along with a transformation in the customer experience, is at the heart of our strategy for the franchise.

“The company will study the detail of the CMA’s review decision and work constructively with the authority to address the issues raised.”

The UK Department for Transport, which awarded the franchise, said: “Stagecoach/Virgin will take over responsibility for the franchise on 1 March as planned.”

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