Amid talk of the coaching busy season, big numbers passing through Dover despite some difficulties, and the sector prominent via election-related ‘battle bus’ work, it is easy to overlook the foundation that the coach industry is built on in many cases: Contract income.
Delivering a straightforward service without revenue risk seems simple, although history shows that it is not always so. Some contracts can also expose an operator to losing a chunk of business at once if it is unsuccessful at retender, while unplanned cost rises may be problematic if the partner cannot assist. See: Bus operators and Transport for London.
That aside, orders placed by one operator for 18 new coaches and eight delivered to another, all for contracted work, suggest that the diverse market for those services is strengthening. Several of the UK’s relatively few zero-emission coaches are for contracts. Those would not have been purchased without confidence in their utilisation.
There is also a hint that some local authority contract issuers accept a need for rates to rise, although that may be via worry of work otherwise being handed back mid-term.
In purchasing coach operators of late, two bus groups made clear that a prime interest in those businesses was their contracted bases. It is unlikely that the last has been heard of such acquisitions, by either bus companies or other parties.
Contracted revenue may not be the most glamourous part of coaching, but it underpins much of the sector. A healthy contract market means a healthy wider industry. Long may that continue.
