Virgin Trains

No. 30/11/2001

The Rail Regulator has received a number of complaints from passengers and passenger representatives regarding the scale of increases of the unregulated fares on Virgin's West Coast Trains. The Rail Regulator has therefore been considering carefully whether it would be appropriate to undertake a formal investigation under the Competition Act 1998, and, in particular, what competition law requires to be established when looking at whether a particular fare charged by a franchise operator is excessive.

The Competition Act 1998 powers conferred on the Director General of Fair Trading, the Rail Regulator and the other sector regulators are not a means for general control of prices. Rather, they are aimed at protecting competition.

The Rail Regulator has concluded that, in the absence either of evidence of excessive profit being generated across a franchise as a whole, or of other evidence that the level of a particular fare has no reasonable relationship to the real costs or the real value of the product offered, there are no reasonable grounds for suspecting a franchise operator of a breach of the Competition Act 1998.

Against these criteria, the Rail Regulator has concluded that there are no reasonable grounds for suspecting Virgin of having infringed the Competition Act 1998. It is therefore not possible to proceed to open an investigation.

The Rail Regulator's findings are consistent with the approaches in excessive prices cases taken by Office of Fair Trading and by the European Commission and Courts.

Download the full text of the decision from the Rail Regulator's website.

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