It has been suggested that the current major changes to routines will lead to a ‘life reset’ for some individuals. But what about the coach and bus industry: Is the coronavirus COVID-19 crisis likely to lead to a business reset for certain operators of coaches? Yes, believes one.
Dave Collier, proprietor of Cambridgeshire-based ABC Nightliners, Cambridge Coaches, Kiddles Coaches and Sunfun Luxury Travel, has been in the industry for 35 years. A “full grounding” of those businesses during the pandemic has given him time to consider what the future holds for coaches post-COVID 19.
Opportunity to ponder COVID-19 and coaches
The temporary halt in operation was accomplished in an orderly and planned manner, Dave says.
“I have furloughed 12 of my 14 full-time staff, negotiated reduced payment terms with my suppliers, applied for all the grants and interest-free loans I can find and received excellent terms from my bankers for the next six months,” he explains.
That unquestionably represents a relatively fortuitous position. Not all within the industry will be able to emulate it. Premises that are paid for and maintenance that is carried out in-house remove further financial worry during the mothball period.
But the extent of the downtime that the pandemic has brought gives time to ponder. While others may disagree with him, Dave believes that regardless of the arrival of coronavirus COVID-19, some things that relate to how the sector functions and its core values need to change if it is to be in a healthy state for whatever the future holds.
Rates are central to that. He speaks of tour companies that expect to pay £350 per day for a Euro VI coach that is under five years old. The obvious question is how that can be viable – both before the coronavirus COVID-19 pandemic, and after it and the financial havoc that it is currently wreaking.
A renewed focus on core markets to follow?
Slimming to a lean and focused business model may be an option, either in the short term or as a permanent revision, Dave continues. “My instincts are to downsize either from 20 coaches to eight or 10 for private hire, or to just three for day trips and short breaks,” he says.
“What I am sure of is that there will not be enough work at the right price for the foreseeable future to justify my current fleet and to allow a reasonable profit to be made.”
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“We have a lot of time to ponder, educate our colleagues and say: ‘Raise prices or ask yourself why you are working for nothing’.
“Nobody needs to send coaches out without payment upfront.
“An operator that is working for a broker or a middleman should remember that they have already been paid. Terms and conditions should be revised to require full payment 14 days before departure. Don’t allow a coach to be booked without a 25% non-refundable deposit.”
A hypothetical reduction in a fleet’s size, while cutting the stress and workload for business owners, would also bring a further benefit, Dave continues: Less worry about driver recruitment and retention.
“Our industry has, for the last two years at least, experienced a severe shortage of good, experienced drivers. That is mainly due to the Driver CPC, insurers’ terms and conditions that prevent new blood from entering, and low pay.
“I accept that drivers have a lot of time where they are not actually driving, and a lot of rest periods, but jobs involving unsociable hours are not what people want.”
‘Don’t forget the industry’s suppliers’
Consideration of the supply side of the industry should not be forgotten, Dave continues. While some finance and leasing companies have worked with operators to develop restructured payment terms, others have been reluctant or unable to.
Repossessed coaches will potentially add further to what in some cases is already a bloated used market. “Yards stuffed with second-hand coaches and then a full-blown recession? Dealers and our parts suppliers will be worse off even than operators,” he says.
What is clear in Dave’s mind is that for some, things will change markedly post-pandemic. Some operators will make those choices themselves as they rebuild or overhaul based on learnings during the current lean period. Others will find that they have no alternative than to reshape.
“Crunch the numbers. Am I being pessimistic or optimistic?” he asks. “Will there still be a price war for home-to-school contracts in 2020, as there is every year?” To both questions, the answer will only become apparent in due course.
Do you agree or disagree with Dave Collier’s thoughts on what the landscape will look like for coaches after coronavirus COVID-19? Email editorial@divcom.co.uk to have your say.
