National Express to comply with MMC

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The Independent Online
National Express yesterday agreed to give undertakings on price and service levels on five coach routes between London and the North after the Monopolies and Mergers Commission ruled that its takeover of the competing rail service, Midland Main Line, was against the public interest, writes Michael Harrison.

Accepting the MMC's findings, Ian Lang, President of the Board of Trade, said that if satisfactory undertakings had not been obtained by 20 March, he would force National Express to comply.

But Mr Lang stopped short of ordering National Express to divest itself of the overlapping coach routes - an option preferred by the director- general of Fair Trading, John Bridgeman.

The five services are between London and Sheffield, Chesterfield, Derby, Nottingham and Leicester where National Express controls 97 per cent of the coach and rail market after being awarded a 10-year franchise to run Midland Main Line in April.

The group will be required to restrict increases in coach fares to the retail price index and maintain the current levels of service unless there is "a significant reduction in passenger numbers".

Ernie Patterson, chief executive of National Express, welcomed Mr Lang's announcement, adding: "The behavioural undertakings sought are broadly in line with those we had previously offered."

The MMC concluded that National Express's takeover of the Midland Main Line from British Rail would reduce competition in the leisure market on the five routes and lead to higher fares for both rail and coach passengers and a lower standard of services.

Around 90 per cent of coach passengers and 40 per cent of rail passengers on the routes are leisure travellers.