17 July 2008

Cambridgeshire blow

The Office of Fair Trading (OFT) has imposed a total of 17 undertakings on Stagecoach Cambridgeshire, following its acquisition of Cavalier Contracts on 1 April 2008. Within days Stagecoach set-up a new company name - Stagecoach in the Fens Limited - and has just last week painted the first Cavalier vehicle into its corporate colours but this must now cease and no further integration is permitted.

The full OFT report can be found here.

Perhaps the most draconian undertaking is the necessity for Colin Brown, a Stagecoach Group director, to inform the OFT - in writing - every 10 days that none of the agreed undertakings has been breached. While publicly Stagecoach insist this is "normal initial undertakings" it is seen as a massive blow that will significantly hinder progress (and profits), specifically in the traditional Cavalier operating area in the LEYTR area and northern Cambridgeshire.

As can be seen from the OFT's report the Huntingdon & District (H&D) name must be retained and that the entire Cavalier business must be operated separately. For the time-being, Commercial Director of Stagecoach Cambridgeshire, Phillip Norwell, has taken over as MD of the Cavalier business. This will ensure that both operations are no longer managed by Stagecoach Cambridgeshire's MD, Andy Campbell.

It would appear that there may be some movement on dropping the Cavalier name, however, as the company's founders, Dennis Upton and Christopher Bloor, are legitimately entitled to continue operating their taxi and private hire business in Long Sutton, Lincolnshire using the Cavalier name - something agreed as part of the sale to Stagecoach.

Why has the OFT come down so hard on this particular purchase? Primarily because the H&D subsidiary was one of three bus operators (Stagecoach Cambridgeshire and Go Whippet are the other two) who was granted exclusive access to the St. Ives Guided Busway when the route opens. Following the acquisition of Cavalier, and thus H&D, by Stagecoach this would be lessened to just two operators - Stagecoach being by far and away the most dominant when compared to family-run Go Whippet of Fenstanton. In order to ensure fair play on the Guided Busway - a route which incidentally has cost more to convert from former rail line to busway than it would to simply re-open as a railway - Stagecoach's wings have been clipped.

Similarly, Stagecoach chose to divest its Milton Keynes and Huntingdon operations in 1995 when it purchased Cambus Holdings, inclusive of Premier Travel and Viscount Bus & Coach of Peterborough as too much of a swathe of the east of England would be under Stagecoach ownership and had they not done so a referral to the then Monopolies & Mergers Commission would have taken place, which could have ruled that Cambus be divested instead and losing Cambridge was never an option for Stagecoach!

Cavalier's logo - perhaps not consigned to history just yet?

It will be interesting to see if the raft of Cavalier/Stagecoach in Peterborough service alterations, planned for 24 August, will take place. Certainly this area of the operation has seen less rigidity imposed, although absolutely no merger of depots or the closing of Long Sutton - widely known to be of no interest to Stagecoach - can take place.