It’s just been announced that the Office of Fair Trading (OFT) will not refer Isle of Wight Ferries to the Competition Commission.
Back in June this year, the OFT gave a provisional ‘No’ but invited additional comments from the public and businesses.
The OFT state that they have found “limited evidence of problems for consumers that interventions in this market could address.” They say that there is room for improvement both in customer satisfaction levels and the amount of information available to users on the performance of the ferry operators.
Heather Clayton, OFT Senior Director of Infrastructure, said: ‘Although we have not found competition issues that warrant further investigation, there are concerns around passenger satisfaction that the ferry operators should address. We welcome the fact that they have taken some steps by agreeing to publish information that will help passengers hold them to account.’
The final findings of the OFT study include:
- In general, average prices have risen at around the same rate as the Retail Price Index over recent years, and overall fares are not obviously out of line with other commercial ferry services across Europe.
- However, better fares are available to passengers who book in advance. Passengers who use the ferry services on a ‘turn up and go’ basis are likely to have experienced higher than average price increases in recent years.
- Overall, the service is reasonably frequent, comprehensive and reliable.
- There are some barriers to entry for new competitors. These barriers are primarily physical, such as limited room on the island for berthing and marshalling facilities for car ferries.
- There is some competition between operators running alternative routes. In the last two decades, both 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.
MP’s work
MP Andrew Turner and his team put huge amounts of work into preparing the OFT submission, so we’d imagine will be disappointed with the final outcome. We’ve contacted them for a comment, but at time of publishing this, haven’t heard back., which we’ve now published.
We’ll also contact the ferry companies to get their reaction.
We’re still waiting to hear back from WightLink.
Update 2: Red Funnel sent us this statement
James Fulford, Red Funnel CEO said: “We welcome the OFT’s final conclusion which repeats its initial findings that fares are reasonable, and services to and from the Isle of Wight are both frequent and reliable. The report also concludes that cross-Solent Ferry travel does indeed operate as a competitive market. Consumers can now be confident that the Isle of Wight offers a high quality, good value holiday and leisure destination year round.
“However a review like this always throws up findings that we can all learn from, and we welcome the OFT’s suggestion that we publish clear information for consumers to share as part of our ongoing focus on improving our service. We’ve undertaken a raft of initiatives to improve communication this year and will be publishing monthly customer satisfaction research and more detailed service reliability data on our website to enable customers to easily assess our performance.”
What do you think?
The full OFT report is available for your perusal.
Ferry prices and services are always a hot subject for discussion on the Island. Do you think the OFT have got it right?
