Certainty & Uncertainty

Witness November’s very downbeat Euro Expo 2010 as an example of the mood of the moment. And all because the banking sector acted irresponsibly. With changes to free travel, BSOG and local transport authority budgets, it’s hard to conclude anything other than service cuts to come.

So it is that between Christmas & New Year, we at Omnibuses try to glance forward towards the year ahead. 2011 will be a momentous year. Some things are certain and others far from it. The bus industry needs to play its part.

The economy & bus use

Businesses hate uncertainty (and potentially rising interest rates). No one really knows what’s about to happen. We can’t comprehend the level of debt in Europe. Is the economy therefore on hold for the bus industry? How does that affect business planning? Uncertainty is itself one of the biggest business problems.

Shopping

In a week’s time, VAT increases, plus pay freezes and higher RPI. If this leads to a high street slow down, it will affect bus revenue. The two are very much intertwined.

Competition Commission

January is interim results month. These findings are likely to be as equally onerous as the data collection itself. Where will this take the industry?

BSOG

In concentrating on BSOG, the industry has been unable to demonstrate the importance and worth of retaining free travel as is. At least we can plan for BSOG -20 per cent. Could be worse.

Free travel

Longer distance & rural services may be hardest hit, as from April the reimbursement formulæ change. Not much time to plan and what will the effect be: fares rises, service cuts, both, or neither?

Unemployment

Every lost job leaves a legacy of 48 weeks of bus revenue loss. Take your area’s weekly ticket and multiply by 48 to see the result per passenger.

Subsidies

Shrinking budgets mean a significant number of local transport authorities are already announcing cuts. Such services could be the difference between profit and loss. Drivers’ jobs may go. LTAs will struggle with the resultant book-balancing commercial deregistrations.

Fuel

This remains perhaps the biggest issue. Now at July 2008 levels with more rises to come, hedging may smooth the ride but it catches up with you in the end.

Structural changes

More back office integrations and municipal sales will try to reduce industry office costs.

Leadership

There are changes new or imminent at the top of both First Group and Go Ahead. Not the easiest times in which to take over.

Manufacturing

2010 wasn’t a great year, with only Stagecoach ordering lots. Will uncertainties carry over the 2011?

And the antidote?

I wish it were easy to state. A clear head, adaptation, plans for each of the likely eventualities, knowing your cost & revenue base and marketing appear the best ways forward...

And elsewhere

Some 30 per cent cuts in staffing at the DfT may mean some jobs left undone. Inflation busting rail fares next month may bring an opportunity for commuters expresses. Can Lothian Buses survive being handed full responsibility for the poorly Edinburgh tram? We await government rail policy decisions.