The reasoning behind Trent Barton’s actions on its joint services with Felix are beginning to emerge. Though there is still a high degree of speculation, it appears that Felix may have wanted to sell but not necessarily, if at all, to Trent Barton. The most likely purchaser may have been Premiere, whose main competitor is, of course, Trent Barton. Hence one very good reason why Trent Barton has stepped in immediately ahead of Felix, albeit for a very short period. Trent Barton’s actions may have been unstoppable before they realised Felix may not, after all, be selling. Not that the public will necessarily understand Trent Barton’s motivation.
This remains unconfirmed, though Trent Barton has spoken to the trade press. Where Trent Barton’s actions stand in the light of the Competition Commission’s preliminary findings, though, is of more interest.
The CC wishes to simulate rather than restrict local bus competition. But if Felix wishes to sell, it matters little whether this is to company P or T, as a sale results in one operator fewer. On the other hand, selling to company T potentially restricts future competition on specific routes (although at the moment there is a certain degree of joint working). And, is there a parallel between over-bussing and the CC’s views on an operator destabilising the sale of an arms-length municipals?
It may be that Felix didn’t like the price offered by one of its suitors. But the result of Trent Barton’s actions might mean that Felix might never get the best price for its business. But, should Trent Barton open hostilities in the future, Felix might not get *any* price.
Sometimes, I wonder exactly what smaller independents are actually worth. Is there any value in a business where a competitor can simply buy a couple of extra buses, employ a few more drivers and run five minutes ahead? This must surely be cheaper than buying a bus operator outright. Different, perhaps, for a coach operator where goodwill is important.
Meanwhile, Felix is appealing to its regulars to wait five minutes rather than catch the Trent Barton competitor. There will no doubt be faithful customers. But these are still joint services and passengers will be used to swapping between providers. And in the age of concessionary travel, where travel is free at the point of use, is there now such a thing a loyalty any more?
Saturday, 29 October 2011
Implications
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14 comments:
Of course there isn't much loyalty. Many bemoan the loss of the corner shop, the homogenisation (? probably not a real word!) of our town centres etc and even sign petitions with an evanglelistic passion.
But they still shop at Tesco!
25 years on, the price of deregulation remains the same.
Although I don't know the reasons behind these goings on, I can say that Felix's accounts for 2010 showed net assets of GBP 1,726,510 of which GBP 1,377,089 was recorded under the very comforting heading "cash at bank". It therefore appears that they can withstand short term competition if they have the will to do so.
Surprised that nobody has mentioned who at Trent was behind this latest fiasco. No doubt he'll appear on here shortly, as usual, to say why he's not the guilty party.......
[It's beginning to sound a bit like all the other problems that have affected the Wellglade group in recent times]
Be a shame if Felix does go but as FBB says there is no loyalty these days.
Following his analogy about Tesco at least it has competition to keep in check. If TB have exclusive rights to the Ilkeston to Derby route what's to stop them slashing the service or ramping up the fares?
Am I the only one thinking the wheels are coming off the 'good guy' image that TB had built up?
Actually, I think there is such a thing as loyalty in this case. If Trent are angry about Felix not selling, it sounds like they are just trying to make Felix pay for making a decision that Tent don't agree with
re 17.12 from Rich
I think the 'wheels on the (Trent) bus went round' very well most of the time, although there were some problems surfacing beneath the veneer.
The newer management team don't appear to have the same capabilities as their predecessors and seem to believe that a 'blunter' approach is required to some issues. A great shame.
BT used to say in their adverts "it's good to talk". It seems to me that Trent Barton management may have been a bit hasty, and soon realised this. However, if Felix management had told their operating partners that they were looking to sell, then all of this might have been avoided. Word on the street locally is that there was a covenant in the will of Felix founder Norman Frost (who died in the early seventies) that prevents the company being sold to Trent unless it is sustaining a certain level of financial loss, but it is not clear whether this is true. Trent Barton Commercial Director Alex Hornby has stated on this blog that all will become clear in due course. I suspect this is so, but the reputational damage in the eyes of Felix customers to Trent Barton seems to be occurring because Trent Barton sought to protect their position in a situation where they did not know what their operating partner was doing. Clearly, with the current competitive situation with Premiere, they could not just sit on their hands, although it is not yet clear whether Premiere have made an offer to purchase Felix. Anonymous comment at 10.29 gives some interesting background perspective. Anonymous at 15.51, can you please specify what problems have affected Wellglade in recent times, as I don't see any. It does appear, though, that the current Trent Barton management is less conservative than those previously in day to day control.
There is an interesting picture on derby bus depot of the White TB 'extra' bus.
Interesting in that is doesn't really look as thought TB are that bothered about putting bums on the seats of these White buses, given the very small destination card in the front window, and no other branding/signs on the bus.
If this picture is a true reflection of how TB is runningthis service (as opposed to a broken digital display in this picture) it seems at least that TB is trying to recover the relationship as much as possible but taking as little revenue from Felix as possible.
Rumours & speculation.....
Vehicles have been painted plain White running only five minutes before Felix. Felix are distributing leaflets urging customers to let the first bus go & catch theirs & it's only for a few days. What's going on........
Well that's just it. No one know 100% yet & the speculation is growing. Lol but really I think we all know what's going on.....
First of all I'm very confused that trentbarton & Felix both operate the Ilkeston flyer. I understand the situation with the Black cat route, both companies have ran the route via West Hallam for Donkeys, Trent as the 120 & Felix as the 12.
From memory of a couple of trips I made in the late 80's, the Ilkeston flyer as it's now known, was operated by Derby City Transport hourly via Chaddesden, Eden Road & a loop around Kirk Hallam. I'm under the impression DCT or Arriva relinquished the route to Trent in the early 90's & within a short period Trent rebranded the route & name into the current form, cut out Chadd to run fast via the A52 bypass directly. Where Filix partnership fits in there I don't know? Isn't the current 20 minute service- Trent 2 buses, Felix 1 bus per hour?
Felix wanting to sell their commercial routes is fair enough but Premiere considering purchasing them only suggests it's a very bizarre game Premiere are playing in the area. its looking very much like any chance premiere has in undermining Trent they go for it! An outsider looking in could be forgiven for thinking Mr Greeves is an ex Trent employee who's had a very large windfall & seeking every opportunity to attack Trent!!
At the end of the day, who can blame the management of trentbarton for protecting their business.......
Incidentally Premiere have picked up the 330 national express service Nottingham - Loughborough - Leicester - Birmingham - Bristol - Newquay - Penzance.
Anonymous said...
"However, if Felix management had told their operating partners that they were looking to sell, then all of this might have been avoided."
This sounds good in theory, but in practice commercial business owners simply don't work like that. If the owners of Felix want to sell, but not to Trent, then they are not going to approach Trent and say "We are going to sell, but not to you! Just letting you know!"
They might put the business up for sale via a commercial agent, in which case Trent might recognise the business from the description in the advertisement, but if it is a private sale, then it is likely to be precisely that - private.
No one has considered the fact that Premier could have approached Felix with a view to their service work, to get a foothold on an established route where they could immedately flick the Vs at Trent Barton, only to be told by Felix that they weren't for sale as their constitution prevents this. To suggest the top brass at TB would be totally unaware of this is likely to be misguided. TB probably chose to ignore or disbelieve any reassurances from Felix, thinking "we can take them, no worries" and registered routes to do just that.
Until something happened to prove Felix really wasn't going to sell and the really good bus company suddenly realised it would have a really bad egg on its face so hurriedly withdrew its buses... except annyoing it came a week to late before it could do so 'under the radar' as far as the passengers could see.
And this venture has actually cost TB a fair amount of money - having to run pointless buses.
Some interesting comments all round. This all looks like cock up rather than conspiracy and will have cost Trent Barton something in money and goodwill.
Is Felix worth anything financially? It has a modern fleet and plenty of local goodwill, so these have some value. In reality, though, Trent Barton, could be aggressive (although I think this unlikely, despite appearances, as they have not attacked any established operators, only responded to aggressive competitors like Delta (mid nineties) and Premiere).
There would always be an element of doubt for a potential purchaser, so this would diminish the price that anyone might be prepared to pay for the goodwill.
maybe the white buses could have the strapline 'the really lost the plot bus company' - competing against a small independent with a loyal customer following will do them no favours whatsoever.
"maybe the white buses could have the strapline 'the really lost the plot bus company' - competing against a small independent with a loyal customer following will do them no favours whatsoever."
It is worth reminding people from outisde the area that TB already run on both of these routes in partnerhsip with Felix (inter-availability of return tickets, single timetable showing both operators, common branding) and have done for many years. I'm not sure what TB were up to, but for most passengers they already probably don't care which operator comes first as the bus/fare will be virtually identical.
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