As you may have have seen the Isle of Wight Ferries: OFT (Office of Fair Trading) market study has been launched today.
The OFT say that the complaint by Andrew Turner and the OFT’s own initial research has highlighted the following issues
“¢ Whether the market for Isle of Wight ferry services is working well
It has been suggested that prices are relatively high, and that levels of customer service are declining. There is also an apparent lack of transparency in the fee structures of the ferry operators.
“¢ The prospects for new entry to the market
There has been no new entry into this market in recent years. Barriers to entry and expansion appear to be high due to a lack of capacity in existing landing facilities and planning constraints on the development of new facilities.
In addition, the OFT understand that Wightlink and/or Red Funnel have an interest in some of the available landing facilities and/or harbour infrastructure.
“¢ The importance of ferry services to the Isle of Wight’s residents and its economy
The ferry services are key to personal and commercial life on the Isle of Wight. The size and nature of the Isle of Wight means that it is highly dependent on movement of people and goods to and from the mainland.
In addition, the Isle of Wight’s economy is heavily reliant on tourism. As there is no rail or commercial air link to the mainland, the ferry services are essential in this regard.
Figures from the Isle of Wight Council indicate that tourism generates some £360m in direct expenditure which is a significant part of the economy and supports 20 per cent of local jobs.
Possible wide reaching consequences
The OFT are also interested in investigating this area as “aspects to this study that could inform its approach to other markets, notably other ports and ferries markets but also wider infrastructure markets, for example those with similar ownership models,” so it’s findings could become wide ranging.
There’s a lot more detail in the document that the OFT issued today, including the scope and the focus of the study.
