Been reading in Railway Herald about the East Midlands franchise award potentially lessening competition.
The article particularly highlights Norwich - Ely as a route where ticket prices could rise as both operators are run by the same company.
I struggle to understand this and the whole "competition" thing because:
1) Rise prices too much, people will look elsewhere. Look at what the nominal 5p bag charge did to carrier bags!
2) There are huge amounts of railway stations that have ZERO competition between them. Leicester and Birmingham, Birmingham and Northampton, Birmingham and Derby, Derby and Crewe... yet I don't see high prices on (many) of those routes. (although admittedly XC are expensive anyway.)
3) The Asda/Sainsburys merger was blocked because the CMA thought prices could rise. But they also may not have. See point one.
4) One energy company rises it's prices, the rest follow. This happens every time. Thus competition doesn't drive prices down at all, surely?
5) The same with petrol. One hint of a rise in oil and BOOM, prices are up everywhere. Yet it isn't so quick when oil falls in price. Again, competition not really working.
So are the CMA a little too cautious?
The article particularly highlights Norwich - Ely as a route where ticket prices could rise as both operators are run by the same company.
I struggle to understand this and the whole "competition" thing because:
1) Rise prices too much, people will look elsewhere. Look at what the nominal 5p bag charge did to carrier bags!
2) There are huge amounts of railway stations that have ZERO competition between them. Leicester and Birmingham, Birmingham and Northampton, Birmingham and Derby, Derby and Crewe... yet I don't see high prices on (many) of those routes. (although admittedly XC are expensive anyway.)
3) The Asda/Sainsburys merger was blocked because the CMA thought prices could rise. But they also may not have. See point one.
4) One energy company rises it's prices, the rest follow. This happens every time. Thus competition doesn't drive prices down at all, surely?
5) The same with petrol. One hint of a rise in oil and BOOM, prices are up everywhere. Yet it isn't so quick when oil falls in price. Again, competition not really working.
So are the CMA a little too cautious?
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