MyFerryLink Appeals Cross-Channel Ban
Tuesday 05 August 2014
MyFerryLink has appealed against the decision of the UK monopolies regulator to cease its operations by the end of the year, but faces an uphill task.
At the end of June the UK Competition and Markets Authority (CMA), formerly the Competition Commission, confirmed its decision made in 2013 to ban Groupe Eurotunnel, owner of MyFerryLink, from operating ferry services from the port of Dover.
The CMA did so as, by adding ferry services to its existing Channel Tunnel business, Eurotunnel would increase its market share to more than 50%, which the CMA argued would cause prices to rise for passengers and freight customers due to lack of competition on the route.
At least two of the three ferry operators on the Dover-Calais route are losing money on it, including MyFerryLink, and in a recent statement Eurotunnel stated that, "For cars, a continuing lack of awareness of MyFerryLink is slowing its progression". The other two operators are DFDS and P&O Ferries.
The CMA believes that if Eurotunnel is allowed to continue its ferry service one competitor is likely to withdraw from the route, which would leave Eurotunnel as the operator of both the rail link and one of two ferry services operating on the route.
The workers cooperative of MyFerryLink has a fleet of three vessels, which were acquired by Groupe Eurotunnel following the liquidation of its close competitor SeaFrance in January 2012.
The vessels recommenced service on the Dover-Calais route on 20 August 2012 and MyFerryLink currently operates up to 24 daily crossings on the route.
The company has over 500 employees based in France and around 70 in the United Kingdom.
The CMA has offered to allow Eurotunnel to sell the MyFerryLink business to an independent purchaser. This is an option that has been rejected by Eurotunnel, who say that under the terms of the purchase of the three vessels from SeaFrance they are forbidden to sell them again until 2017.
The Chief Executive of Eurotunnel Jacques Gounon recently stated that although they would appeal the decision of the CMA, and that they feel they would win the appeal, there was the very real prospect of MyFerryLink having to halt its services this year as the court ruling would not be made until 2016, by which time they would have been obliged to cease operations.
In addition to legal action there are also political moves behind the scenes to try and unlock the situation, with the French Transport Minister, Frederic Cuvillier, recently stating that, "L'État est déterminé à déployer tous les moyens pour trouver une solution qui permette de continuer l'exploitation des navires et de préserver les emplois".
Despite the uncertainty the company has published its schedule for the remainder of the year, and Matt Davies, Managing Director of the leading on-line ferry ticket agency Direct Ferries says that “There is no doubt that the presence of MyFerryLink in the market has been very beneficial for consumers, for we have been able to offer some very attractive rates throughout the year.”
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