3 Industry Consolidations

1. Chase Bus Services → Arriva Midlands

The recent sale of Chase Bus Services provides a case study illustrative of the changes currently ongoing within the bus industry.

What is probably the last substantial operator of Leyland Nationals, 27 vehicle Chase Bus Services of Burntwood, passed to 735 vehicle Arriva Midlands on 25 February 2007. That Chase is predominantly a Leyland National user is interesting in itself. 23 of its vehicles are Nationals (the others being three Dennis Darts and a sole DAF Ikarus). The take-over will see the phasing out of the elderly Nationals.

The continued use of Chase’s LN1s into 2007 is remarkable given that this year is the 35th anniversary of their appearance in production form. Leyland produced the last LN1s in January 1980, following the arrival of the updated LN2 design.

Chase characterises recent moves towards consolidation within the industry, as the larger groups’ appetite continues to show no sign of diminishing.

Compare this to twenty years ago. As the régime passed from regulation to deregulation, larger operators were more inclined to compete against rather than buy smaller operators. The argument then was, why should a larger operator buy a smaller one when it can operate the smaller’s routes in any case. That such competition is now often viewed as wasteful and expensive is indicative of the way in which the industry has evolved and matured, and is moving more towards quality than quantity.

Chase is also an example (albeit a small one) of a company restructuring its operations to concentrate on bus services rather than coaching. It was a year ago that Chase sold its two coaches to Zak’s, now part of AIM-listed Rotala.

It's interesting as an aside that the Rotala website shows a picture seeingly of a First Hampshire Wright bodied Volvo B7LA articulated bus. It's equally interesting that Chase did not pass to Go Ahead’s growing portfolio of bus services in the West Midlands.

2. NCP → Macquarie

There’s news of more consolidation. The possible take-over of 3i-owned NCP (National Car Parks) by Macquarie Bank, operators of former Stagecoach London services, would bring with it 65 vehicle NCP Challenger. NCP Challenger commenced operations in November 2005 with two west London TfL contracts and has subsequently added a further three.

NCP also provides airport-orientated park and ride, airside, air staff and hotel courtesy services, including the 2005 formed NCP Interline operation.

Macquarrie bought Stagecoach’s 1,300 London operation in August 2005 for £264mil.

3. City Sightseeing (north east) → Stagecoach North East

A franchising agreement giving Stagecoach unlimited local rights to Ensignbus’ City Sightseeing brand follows the recent sale of Ensignbus’ Stratford Blue and Cambridge Blue operations in January 2007 and December 2006, respectively.

Like the deals further south, that in the north east involves no vehicles. Stagecoach aims to grow the City Sightseeing operation.

The take-over of Stratford Blue marked Stagecoach’s return to local bus services in that town, following its retrenchment in 1999, owing to poor performance. Stratford services first passed to open top operator Guide Friday, then to a re-emerged independent Stratford Blue, soon to be taken over by the Status Group (of Milton Keynes City Bus fame). Status closed its Stratford operation in 2000. Upon open top competition in Stratford between Ensignbus’ City Sightseeing and incumbent Guide Friday, Ensignbus acquired Stratford Blue’s legal entity and began operating local services from Stagecoach’s former premises.