If you are a bus operator life is tough, thanks to a combination of urban congestion, falls in high street activity and rising costs, set against cheap motoring.
For small operators this is even worse, especially on the back of the sharp reduction in tendered networks.
Therefore, the news that bus industry profits in 2014/15 rose for the second consecutive year, is cold comfort (see p10). Indeed this is not, as headlines might suggest, great news. It merely marks a recovery from a low point that in the long term would be untenable.
The number of operator failures during this period due to a lack of cash underscores the true picture.
Despite what some politicians and campaigners claim, ‘excessive profits’ are not a feature of the industry.
The report contains a detailed analysis of exactly what the margins are, and importantly, a clear explanation of why profits are needed, and at what level.
For any operator wishing to set out its case to politicians – whether in the context of partnerships or other relationships – would be well advised to obtain a copy of the report. It provides much useful information, background and context that you can add to your armoury.
Significantly, it also shows that the big four groups are heavily cross-subsidising rural businesses. If they were in private hands, it is likely that these areas would not have the networks they currently enjoy.
Mel Holley, Editor
