A report compiled by the the Competition and Markets Authority (CMA) has advocated greater competition from open access operators on intercity routes.
Attracting more open access operators to compete with franchised services, or splitting existing franchises, would offer “immediate benefits from increased competition”, the CMA has said.
The CMA also said that a system of having several operators licensed to run services for each route shouldn’t be ruled out.
One of the few current examples of “on-rail” competition exists on the East Coast Main Line, where Grand Central and First Hull Trains compete against franchise holder Virgin East Coast. However, open access services only represent 1 per cent of passenger miles on this route.
The report, which has been submitted to the Secretary of State for Transport’s office, suggests that increased competition on key intercity routes would result in cheaper fares, better service quality and more passengers.
Alex Chisholm, CMA chief executive said: “We’ve found that there is strong evidence, both here and abroad, of the benefits that the introduction of competition on mainline intercity routes can bring.
“Where competing operators have been given the opportunity, the need to attract passengers who have a choice can mean lower fares, new routes and destinations, more innovations and flexible ticketing. Not only does this offer a better deal for existing travellers but it can increase overall passenger numbers by attracting new customers to the railways.
“In a more competitive environment companies will push to be more efficient and for there to be better use of existing capacity – so there are benefits for both the network and the taxpayer who helps subsidise the railways.
“There are legitimate concerns about the impact that greater competition might have on the income received by government from franchise operators but so far that concern has been tackled in a way that hinders new entrants. We think a better way would be to have a level playing field – where competing operators are able to make more of a contribution to network costs and to funding unprofitable services. In return they would get more freedom to compete for business against the franchise operator.
“There’s a real chance here to extend these benefits across a wider area and the timing is undoubtedly right to push for change. We hope all those involved with the future of the rail network will look at our report carefully and seize the opportunity.”
