One route is withdrawn and two have been allowed modifications, although two further changes were blocked
The Competition Commission (CC) has provisionally allowed FirstGroup to withdraw one bus service and modify two other services in Glasgow, but has ruled against other requested changes from the operator.
The services are covered by undertakings given by FirstGroup in 2004 to the CC when it took over the Scottish rail franchise. These undertakings include limits on FirstGroup’s ability to make changes to bus routes and frequencies.
The original undertakings were accepted by the CC in October 2004, following an investigation into FirstGroup’s acquisition of the Scottish rail franchise. The CC concluded that the acquisition could reduce competition on certain routes and have adverse effects for passengers.
In particular, the CC was concerned there could be potential for First to encourage passengers to switch from bus to rail services by altering service levels and routes.
FirstGroup was therefore required to sign undertakings before taking over the rail franchise, which prevented it from altering service levels on a number of local bus services in Glasgow and Edinburgh. FirstGroup can apply to vary these undertakings if there has been a change of circumstances – for example, if the routes have become loss-making since the undertakings were originally agreed.
The CC agreed First Glasgow can withdraw the 64 service between Carmyle and Glasgow Central as well as modifying the 19 (Easterhouse–Glasgow Central), and 262 evening and Sunday service (Airdrie–Glasgow Central) because they are continuing to make a substantial loss. The CC provisionally ruled against allowing changes to the 31 service (Glasgow Central–East Kilbride) and 262 Monday to Saturday daytime service. The CC has also agreed to some changes to the undertakings to change the way in which they are monitored, after the OFT advised there may have been a change in circumstances which warranted an alteration to the undertakings. The CC previously reviewed these undertakings in 2007, 2011 and 2012.
Alasdair Smith, CC Deputy Chairman and Chairman of the FirstGroup/ScotRail undertakings review group said: “We’ve looked closely at the financial results on all these routes. We don’t think the performance of the 31 service and the 262 Monday to Saturday daytime services justifies allowing any changes. However, on the other routes, falling passenger numbers or increasing costs means they have been losing money for some time and are unlikely to recover.
“Although we fully understand the concerns of residents and passengers facing these changes, we do not have the power to compel FirstGroup to continue running routes which are losing money – even if they are continuing to provide an important service to some residents.
“The future of such routes is something which the local transport authorities will have to discuss with FirstGroup.”
To comment on the CC’s provisional decision on FirstGroup’s application to vary the undertakings, email [email protected] by 1700hrs, April 19, 2013
