More info:

• Blog
• Hammersmith & Fulham
• Concern for Future of UK Bus Industry
• Community Rail Study
• TAS pilots bus delay software
• Times Newspaper
• Community Transport for SEWTA
• Board Appointment
• Minibus and Community Bus Report
• TAS Rail Study
• ITU Savings
• CIC
• Board Appointment
• Market Profiler
• Fresh Challenge
• Skills Development
• TAS Expands
• New website

News:

Concern for Future of UK Bus Industry

• printer friendly
• send to a friend

Concern Grows for Future of UK Bus Industry as Profits Fall Again

5 December 2007

A leading transport consultant has expressed concern about the future viability of the UK bus industry, following research which shows that industry profit levels have fallen again, to their lowest levels since 1993.

The analysis, based on the results of over 130 bus companies around the country, was published today in Bus Industry Monitor 2007 by Preston-based consultants TAS. The data shows that pre-tax profit levels in 2005/06 fell back to 6.6% from 7.2%. “This is the seventh fall in eight years,” commented the report’s editor Chris Cheek, “and if current trends continue, the industry will go into the red in the foreseeable future.”

Profits fell in all areas of the country except London, and are particularly low in the English Shires (where margins have fallen to 3.9%) and Wales (3%). Companies operating in the big regional cities earned the highest pre-tax margins in 2005/06 (8.4%, down from 10.3%) and in Scotland (8.3%, down from 10.5%).

According to TAS, the explanation for the fall in profits lies primarily in increased operating costs, caused by rising fuel prices, increased wages and higher pension contributions – and slower and less efficient schedules as traffic congestion grows.  Operating costs rose by over 9% during the period under review, with unit labour costs rising by an average of 4.4%.

“Companies actually did rather well at growing their revenue: it rose by over 8%, thanks to increased passenger volumes and fare rises,” Cheek explained, “but the revenue growth was swamped by these rises in costs.”

Modelling work done by TAS shows that for each 1% change in bus speeds, bus operating costs rise or fall by 0.8%: according to Government figures, average traffic speeds in urban areas fell by 4% between 2004 and 2006.  “We reckon therefore that this drove costs up by over 3% - on top of the rise in wage rates and diesel prices,” added Cheek. “As services get slower, it takes more resources to provide the same frequency,” he explained. “This is not sustainable, and people in local authorities and bus companies really do have to get together and act decisively to increase bus speeds.”

Other highlights from the report include:

·         a 4% rise in industry investment in 2005/06 to £563m

·         a 45% rise in public spending on bus services and concessionary fares over the last five years to a total of £2.4 billion.

ENDS

For further information, contact Chris Cheek on 01729 840756

NOTES TO EDITORS

1. TAS Publications & Events is the publishing arm of The TAS Partnership. Founded in 1989, TAS has since grown to become the UK’s leading specialist public transport consultancy with an annual turnover in excess of £1.5m.  Its recent clients include the Department for Transport, the Scottish Executive and the Welsh Assembly Government, as well as local authorities and transport operators throughout the country.
2. Bus Industry Monitor 2007 is the 17^th report in an annual series going back to 1991.
3. The report is available as a single publication (from £330) or in six separate volumes (from £46). Further details can be found on the TAS website at http://www.tas.uk.net/.
4. The Executive Summary of the report can also be viewed on the web – visit http://www.tas-passtrans.co.uk/Summary-07.