Dereg – First 20 Years Pt 15

Part 14 here

NICHE MARKETS

One of the most noticeable trends of the 20 years of deregulation is the continued growth of large operators, as both municipals and former state-owned bus companies have sold. The results are the Arrivas, Stagecoaches and Firsts of this world, with the result that the landscape when compared to 1986 is completely different – only two former National Bus Company subsidiaries remain, just 16 (soon to be 14) local authority operators and no ex-PTE operators.

Company sales were a marked phenomenon in the late 1980s and early- and mid-1990s but the big boys still have an appetite for the minnows. We’ve seen some spectacular purchase of late. After a lull, 2005 was particularly busy, and it included some family-run businesses. Perhaps this resulted from the large groups making it clear they were in the market. Perhaps some smaller operators were simply fed up with what they view as increasing “red tape”. Those going west have included Bournemouth’s Yellow Buses and Wales’ Glyn Williams. Hull’s Alpha Coaches went to Dunnline which, in turn has sold to Veolia (Connex). And there was the Traction Group, Glenvale and MK Metro.

But there are still some smaller operators left in very healthy positions. It’s interesting that a number have found themselves a niche. Often, these deregulation survivors are not always the family-run concerns once picking up the crumbs left by National Bus Company subsidiaries but new entrants whose modern management techniques and skills are as good as the large groups’. In fact, it’s often the smaller, family run concerns that have struggled to the point of extinction, as they have found it difficult to keep pace with increasing costs and diminishing returns.

The newer smaller operators specialise in perhaps subsidised services, disabled people or in areas of larger operator retreat. The secret of their success is often a local product knowledge combined with the willingness to accept a smaller profit margin than the stock exchange quoted operators. Avon, Shamrock (Wales), GHA Coaches, Cumfybus, Thames Travel, Richards Brothers, UK North, Huyton Travel, Thames Transit, Truronian and Western Greyhound all spring to mind. Some have varying degrees of family foundations; others are relative newcomers. All have developed a niche within the last 20 years of a deregulated environment. Smaller new entrepreneurs can also be found all over country, carving their own their specialisms.

Whether or for how long some of the smaller operators will remain is an interesting point. While family-run firms may continue to see further decline, the new bread may yet survive.

To be concluded