Scottish Citylink
In September 2005 Stagecoach and ComfortDelGro announced a joint venture in the provision of express coach services in Scotland, ending intense competition between ComfortDelGro's subsidiary Scottish Citylink and Stagecoach subsidiaries Megabus and Motorvator. Under the terms of the joint venture, the Stagecoach Group acquirea a 35% stake in Scottish Citylink Coaches Ltd, with Citylink assuming certain rights to the Megabus and Motorvator brands in Scotland. Megabus operations in the rest of the UK were excluded from this agreement. Despite being a minority shareholder, Stagecoach appearred to have assumed all but full control. Stagecoach staff replaced much of the former Citylink management, while Stagecoach subsidiaries began operating many of the routes formerly operated by subcontractors, albeit with vehicles in full Scottish Citylink livery. Citylink frequencies and routes have also been sacrificed in favour of Megabus where the two brands overlap.
The Competition Commission ruled in October 2006 that the joint venture substantially reduced competition and that evidence suggested some routes were already experiencing higher fares as a result. Though no firm conclusion was drawn, regulators are to consult the two companies about what they need to do to comply with competition regulations and they have indicated that this will likely lead to the forced divestment of some services to an independent operator. The ruling was criticised by Stagecoach as leaving vital services in limbo and jeopardising Scotland's intercity coach network, making it unable to compete effectively with rail and private car journeys.
To satisfy the Commission, some Citylink routes were sold to Parks Motor Group in early 2008.
Read more about this topic: Stagecoach Group
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