Isle of Wight ferry services
Launched: February 2009
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Purpose of the study
To explore whether the services worked well for consumers and decide whether to make a market investigation reference (MIR) to the Competition Commission.
(Study followed in-house work.)
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Findings
The study found limited evidence of problems for consumers that interventions in this market could address. This may make it disproportionate to refer the market to the Competition Commission for further investigation at this time.
The main findings include:
- The service is frequent, comprehensive and generally reliable. Nonetheless, the level of complaints received by the study shows there is room for improvement in customer satisfaction. To address this, the OFT proposes operators should publish clear, consistent information which makes it easier for ferry users to track prices and service quality.
- In general, average prices have risen at around the same rate as the Retail Price Index in recent years. Increasingly, people who book in advance pay less than people who book on the day for car crossings. This may explain the perception of price increases for these journeys.
- There are barriers to entry for new competitors in this market. These barriers are primarily physical, such as limited room on the island for berthing facilities for car ferries, and not necessarily caused by the ferry operators' control of existing facilities.
- There is some competition between operators running alternative routes. Over time, Red Funnel and Hovertravel have taken some market share from Wightlink.
- There is little same-route competition. However same-route competition is unusual in ferry markets and typically sustainable only on busy routes, such as those across the Channel.
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Recommendations
None.
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Action following market study
- The OFT has consulted on the findings of the market study into Isle of Wight ferry services, including its provisional decision not to refer the matter to the Competition Commission.
- Following a two-month consultation on the findings, the OFT decided it will not be referring the market to the Competition Commission at the present time.
- The study found limited evidence of problems for consumers that interventions in this market could address, but found room for improvement both in customer satisfaction levels and the level of information available to users on the performance of the ferry operators.
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Market study details and report
See press release 'Isle of Wight Ferry services findings - OFT consults'. 12 June 2009
Download a copy of the market study report 'Isle of Wight Ferry Services: Market study findings and consultation on proposed decision' June 2009 (pdf 654kb)
Download the FAQs (Word doc 34kb)
See press release 'OFT announces decision on Isle of Wight ferry services'. 14 October 2009
Download the OFT's final decision 'Isle of Wight Ferry Services: Market study findings' October 2009 (pdf file 2.06mb)
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Background information
See press release 'OFT to launch market study into Isle of Wight ferry services'. 27 February 2009
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