Arriva North and Northern Rail merger – CMA Investigation
First published by Author on August 23, 2016 in the following categories: Latest
The Competition and Markets Authority (CMA) is investigating whether a merger situation has taken place between Arriva Rail North and Northern Rail Limited that would result in a substantial lessening of the market(s) in the UK.
On 1st April 2016 an initial enforcement notice was served by the CMA on to Arriva Rail North to ensure that no action is taking place until it has been determined whether the potential merger would cause a substantial lessening of competition.
With the current state of our rail system already a less-than-pleasant experience for consumers with high prices, cramped carriages, and regular delays, there are real and valid concerns over this situation.
Background
The Northern Franchise is the largest rail franchise in Britain as it serves 526 stations while operating over 15,000 local and regional services per week. The franchise provides inter urban, commuter, and other services across the North of England. This includes long distance services such as Nottingham to Leeds; urban services like Sheffield to Manchester; and rural services such as Hull to Scarborough.
The Department of Transport announced on 9th December 2015 that Arriva Rail North was the successful bidder for the Northern franchise.
The Arriva group operates major bus services across all of the UK, being the third largest operator in the bus market. Due to this, it means there are overlaps between Arriva and the Northern franchise.
The overlap
Due to the size of the companies, there are overlaps in the market for public transport services such as bus and rail services. When a customer is presented with more than one option for a particular service, factors such as frequency, punctuality and cost are considered before a ticket purchase has been made.
By the merger taking place, it could allow Arriva to worsen what it offers to passengers and reduce the introduction of additional services. This could lead to an increase in prices or a reduction in how frequent the transport is. This could see customers switch to use the Northern Franchise or vice versa.
Undergoing investigation
The investigation on whether there would be a substantial lessening of the market in the United Kingdom is currently taking place, and the provisional findings and possible remedies will be completed by end of August. We will keep you up to date with the outcome of the case.