The OFT have released what it calls a consultation on the provisional findings from its market study into Isle of Wight ferry services.
The summary – They’re not sure that there are enough grounds for taking the investigation to the next stage.
In the OFT words …
“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.”
Glimmer of hope
The use of the word “may” in, “this may make it disproportionate,” leaves the door open for possible further investigation.
The OFT have also said that they will consult with key parties directly, while inviting the written views of others, by 5pm on 12 August 2009.
We understand that this is only the second time that the OFT have continued to consult following publishing.
UPDATE: MP Andrew Turner said, “Whilst this provisional ‘no’ from the Office of Fair Trading is disappointing I am most certainly not giving up. The report is 93 pages long and I will be taking time over the weekend to analyse it in depth and to digest the OFT’s findings.”
OFT suggests actions
The Chief Exec of the OFT, John Fingleton, said, “Although we found the service generally reliable, we believe there are real issues around customer satisfaction which the ferry operators have responsibility to address” (VB’s italics).
The OFT suggest that as a “good first step,” that ferry operators “publish clear, consistent information about their performance.”
The OFT feel that this will allow those travelling on the ferries to compare prices and the reliability of them, with the side benefit of “greater scrutiny of ferry operators going forward.”
Main OFT findings
The main OFT 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.
OFT Chief Exec comments
John Fingleton, OFT Chief Executive, said: ‘Isle of Wight ferries provide an essential service for local residents and visitors to the Island. Although we found the service generally reliable, we believe there are real issues around customer satisfaction which the ferry operators have responsibility to address.
‘We suggest a good first step for them would be to publish clear, consistent information about their performance. As well as allowing consumers to compare prices and service quality it will also ensure a greater scrutiny of ferry operators going forward.”
Can you help?
The report is 90+ pages long and if you have time, it’d be great if you could have a read of it, think about the ramifactions and commenting/sending us your views – it’s here in full.
