STAGECOACH MUST SELL PRESTON BUS

Looks like we shall all be out with our camera again in Preston,

Stagecoach has been ordered to sell Preston Bus

Stagecoach has been ordered to sell Preston Bus, a decision which the company describes as “perverse and irrational”. The Competition Commission says that the sale of the business will be the most effective way of restoring competition in the city and safeguarding passenger interests. The CC will approve the successful buyer to ensure that it is capable of operating as an effective competitor to Stagecoach. The sale will include the depot, other assets and a network of routes, including services formerly run by Preston Bus. Stagecoach purchased the loss-making Preston Bus business in January 2009, at which time it employed 300 people and ran 120 buses.A Stagecoach spokesman says: "We fundamentally disagree with the Competition Commission's decision. It is a perverse and irrational contradiction of competition law and common sense. The Commission decision is to restore a failed monopoly provider of local bus services and reverse the results of legitimate competition, which it is supposed to uphold. This decision risks setting a dangerous precedent for all sectors of the economy.”The CC had been considering what action to take after provisionally concluding in September that Stagecoach’s purchase of Preston Bus would reduce competition and potentially harm the interests of passengers. Its decision is not a surprise, but reinforces the belief that the organisation is more interested in competition theory than in the economic realities of bus operation. It also appears to ignore the fact that it was in a competitive environment that the independent Preston Bus struggled to survive.CC deputy chairman Peter Davis says: “We found that this merger resulted in a substantial reduction in competition that would, in our view, have an adverse impact on passengers in Preston, leading to a worsening in fares and other factors such as service levels. Without the merger, the competition each company would have faced would have ensured that it maintained or improved its services to attract passengers. “To find the most suitable remedy to the problems generated by the merger we had to carefully consider the lost competition and also important issues such as the role of the bus network in generating customer benefits. Having done so, we came to the conclusion that the most effective remedy will be for Stagecoach to sell Preston Bus to a company capable of competing with it.”Stagecoach’s spokesman concludes: "What bus passengers, employees and local authorities want is a stable, comprehensive network of services and tickets, which Stagecoach has sought to provide. The Commission decision will ensure a further period of instability and uncertainty against the public interest. We shall consider the decision in detail before deciding on our next course of action." ?