6th Dec 2019 09:09
(Alliance News) - The UK Competition & Markets Authority on Friday accepted remedies put forward by FTSE 250-listed travel operator FirstGroup PLC and partner Trenitalia SpA.
They have been proposed after the regulator expressed competition concerns on 21 routes in the West Coast rail franchise.
The franchise, which has been named Avanti, can now be awarded without the need for a phase two investigation, the CMA said.
"After careful consideration, and a public consultation, the CMA has now accepted proposals from FirstGroup and Trenitalia to address its concerns. For both West Coast Rail and TransPennine Express services these include caps on unregulated fares and maintaining the same availability of cheaper advance tickets for all 21 routes that raise competition issues," CMA said.
West Coast Rail, a joint venture between FirstGroup and Italian train operator Trenitalia, was awarded the West Coast rail franchise by the UK transport department in August. The contract, which is expected to run until March 2031, is for running passenger trains between London and Glasgow from December 8.
The CMA originally had concerns passengers could be "facing higher fares and less availability of cheaper tickets" due to limited competition under the new franchise deal.
Separately, Japanese multinational conglomerate Hitachi Ltd said that it has secured a GBP350 million contract to build 23 new trains for the Avanti West Coast rail franchise. The trains will be built at the company's factory in Newton, County Durham.
The new trains are expected to enter service from 2022. The trains will be a mix of 10-carriage electric trains and 13 five-carriage bi-mode trains, which will switch from electric to diesel power where the railway is not electrified such as in North Wales.
FirstGroup shares were 0.7% higher in London at 117.40 pence each. Hitachi shares in Japan closed at JPY4,219, down 0.8%.
By Tapan Panchal; [email protected]
Copyright 2019 Alliance News Limited. All Rights Reserved.
Related Shares:
Firstgroup