Tams Emery, Business Development Manager, Transportation, Siemens Financial Services in the UK, looks at how sustainability is driving growth in the bus and coach sector – and how finance is helping to fund it
The effects of COVID-19 had a dramatic effect on the bus and coach sector. Scheduled public transport journeys were suddenly empty – and at reduced capacity for some time after – while long distance journeys and shuttle services were largely halted.
Despite the challenges, the industry is now bouncing back. Passenger demand for buses in Great Britain is growing rapidly with journeys up 86% between January and March 2022 (compared with last year). Private operators are reporting significant improvements with one multinational transport company recording pre-pandemic levels of coach occupancy (70%).
But there’s more to this uptick than business as usual. Alongside pent-up demand for travel, there’s been a shift in mindsets when it comes to how we travel.
With focus now set on sustainability (UK’s net-zero ambitions for 2050; consumer appetite, and the rising cost of inflation), bus and coach journeys now offer a reliable and affordable green option.
In fact, I’ve heard directly from customers that these modes of transport now represent something totally different to what they did before. Consumers are getting wise to the fact that coach travel, for example, is not only convenient but greener than many of its alternatives, with lower average CO2 emissions per passenger than air, car, and even rail. With this newfound interest, however, comes greater pressure on operators to provide the most up-to-date and environmentally friendly fleets possible.
To meet demand as well as emissions targets, bus and coach operators are investing in cleaner and greener vehicles, often fuelled by some combination of electric and hydrogen sources. As part of its net zero goals, the UK government has promised to support investment in at least 4,000 new zero emission buses, however annual bus statistics for England revealed that only 2% of the current bus fleet qualifies as zero emission. This means that a lot more investment is required to get fleets on the road to net zero.
In today’s market, there are a number of hurdles to investment. Alongside the more typical barriers such as initial capital cost, bus and coach operators now also have to deal with supply chain issues.
In light of the challenges, operators are increasingly turning to private sector finance to enable investment. Support tends to come from specialist providers who have an intimate understanding of
the technology and its applications/benefits in real life. These financiers will tend to offer a range of solutions which address the multiple needs of green transport development. This will include finance to acquire the vehicles and technology, as well as finance that funds the development of charging or fuelling infrastructures,, all without operators having to use their own capital resources.. The most appropriate financiers will also tend to have a track record of commitment and expertise in the area, enabling customers to achieve their sustainability and environmental targets.
The bus and coach sector is accelerating towards pre-pandemic passenger levels and the drive to net zero is fuelling this trend. Those operators looking to invest in this growth and modernise their fleets should consider the potential of specialist finance. These financing arrangements offer the transparency and flexibility needed to invest now while accommodating future changes to technology. Find out more about how Siemens Financial Services can help you here.
