Bus fare war: market failure or animal spirits?

10 July 2014

First recently took over the 41 route from Manchester to Sale via the universities with brand new, quality single-deck buses. I noticed that First were advertising £1 single fares and then saw that so were Stagecoach on their “Magic” buses. This is great news for occasional passengers. In Manchester in 2008 a single on a Magic bus was 60p, this had increased to £1.60 by 2013 and Finglands, the only real alternative operator was £1.50. Huge above-inflation increases year on year.  I wonder if this is short-term price war over territory? In the meantime passengers will love it.