Edinburgh Tour Operators: Bright Bus, Lothian (Majestic, Three Bridges) etc.

[carlberry]

I'm still surprised that Edinburgh clearly doesn't have a low emission zone in the centre.

Fairly pointless with all the units in Waverly station!

 

[In Focus]

If you already have the volume and a well known name in the market it makes a difference.

I've seen situations where a long dominant existing operator was trading at £15 and a new operator came in at £14, the old operator went to £13 and the new operator went to £10. Overnight the existing operator cut to £9 and what followed was the an absolute hammering for the new operator who had to retreat.

The problem was that by constantly lowering their prices, they were destroying their yields whilst at the same time failing to take any market share of their rival away and were losing more and more money. New operators for sure need to compete on price, but they also need to know when to stop.

Those with deep pockets and high volumes will always want to keep driving the price down because they can sustain that for long periods whereas others can't. Same as Ryanair are saying now that their profits are down as fares are down a fair bit, but they can sustain those prices for the long haul, whereas others won't be able to.

I think First will outstay Lothian if the desire by Group is there to see it through.

 

[overthewater]

isn't that the point, First don't care if the fare start going lower, it just means less money for Lothian to play with..

 

[F Great Eastern]

isn't that the point, First don't care if the fare start going lower, it just means less money for Lothian to play with..

But Lothian already have good yields and income from the various Sightseeing brands that they own and are franchisees for.

A bus company filling 80% of their seats at £8 per day is going to do far better than a bus company filling 10% of their seats at the same price. Of course First could keep going down to undercut them, but each time Lothian match them or go cheaper, it reduces the potential yield without gaining additional passengers.

I can't see shareholders wanting First to get in a below cost price war to try and see off a competitor that also has deep pockets, considering the state of First's finances. Yes a price war within reason, but if they go down too much they may end up in a position where they need very heavy loads to break even.

 

[overthewater]

Your missing the bigger picture, this isnt about making lots of money, It's about hitting Lothian where it hurts.

 

[In Focus]

But Lothian already have good yields and income from the various Sightseeing brands that they own and are franchisees for.

A bus company filling 80% of their seats at £8 per day is going to do far better than a bus company filling 10% of their seats at the same price. Of course First could keep going down to undercut them, but each time Lothian match them or go cheaper, it reduces the potential yield without gaining additional passengers.

I can't see shareholders wanting First to get in a below cost price war to try and see off a competitor that also has deep pockets, considering the state of First's finances. Yes a price war within reason, but if they go down too much they may end up in a position where they need very heavy loads to break even.

I think your slightly missing the point ,LCB venture into West Lothian has taken X amount out of Firsts pockets, First venture into this Lothian monopoly is designed to put X amount back into First pocket .
So will First take more from this venture than LCB will take from West Lothian? ,I'd say it's almost a shoe in they will ,so while Lothian spunk money flying around West Lothian with so many buses running at around 10% capacity ,First pop in and take a percentage of what is a very lucrative tourist market in Edinburgh with very little outlay and minimal risk attached.

 

[Robertj21a]

Pretty sure its coming

It appears that a LEZ is planned for the centre in 2021.

 

[TheGrandWazoo]

But Lothian already have good yields and income from the various Sightseeing brands that they own and are franchisees for.

A bus company filling 80% of their seats at £8 per day is going to do far better than a bus company filling 10% of their seats at the same price. Of course First could keep going down to undercut them, but each time Lothian match them or go cheaper, it reduces the potential yield without gaining additional passengers.

I can't see shareholders wanting First to get in a below cost price war to try and see off a competitor that also has deep pockets, considering the state of First's finances. Yes a price war within reason, but if they go down too much they may end up in a position where they need very heavy loads to break even.

As others have said, I don’t think that this is about making money. This is about hurting Lothian in the belief that they reconsider their West Lothian adventures. First will probably be losing less in WL on account of existing passholders renewing etc and the absence of set up costs.

This move is aimed at now depriving Lothian of revenue - the Lothian open top business won’t suddenly be loss making but if First start depriving them of £16 a head.... Suddenly you might start to think if that is a cost worth incurring in order to compete in West Lothian. I’m sure that’s the First thinking.

 

[winston270twm]

As others have said, I don’t think that this is about making money. This is about hurting Lothian in the belief that they reconsider their West Lothian adventures. First will probably be losing less in WL on account of existing passholders renewing etc and the absence of set up costs.

This move is aimed at now depriving Lothian of revenue - the Lothian open top business won’t suddenly be loss making but if First start depriving them of £16 a head.... Suddenly you might start to think if that is a cost worth incurring in order to compete in West Lothian. I’m sure that’s the First thinking.

Or Lothian go the other way, match First's prices for the tours & ramp up competition even further in West Lothian.....

 

[overthewater]

Lothian already planning to ramp up the competition with more backwards ideas. However even if First get a fiver a head and it cover the fuel and driver, First will not care.

 

[winston270twm]

Lothian already planning to ramp up the competition with more backwards ideas. However even if First get a fiver a head and it cover the fuel and driver, First will not care.

We can all see how good First are, six years in to their turnaround plan, with very little having turned around & their main shareholder wanting rid of half the board.

 

[TheGrandWazoo]

Or Lothian go the other way, match First's prices for the tours & ramp up competition even further in West Lothian.....

They can, of course, do that but how much more can they put into West Lothian - has saturation point been reached.

First may well welcome Lothian dropping their rates. If First go in at £10, and Lothian price match, imagine how much Lothian would stand to lose. Mind you, we’re getting well ahead of ourselves there!

 

[winston270twm]

They can, of course, do that but how much more can they put into West Lothian - has saturation point been reached.

First may well welcome Lothian dropping their rates. If First go in at £10, and Lothian price match, imagine how much Lothian would stand to lose. Mind you, we’re getting well ahead of ourselves there!

I agree with WL reaching saturation, if Lothian did want to retaliate and hurt First further, nothing to stop them heading further up the M9 to Falkirk setting up another base there.

Yes - First have typically done okay at competing with the smaller independents i.e. Webber Bus / Crosville etc, but aren't good at competing with the larger operators with money behind them.

Saying that, come Thurs, it could be the final nail in the coffin for FGP as we know it....

 

[overthewater]

I agree with WL reaching saturation, if Lothian did want to retaliate and hurt First further, nothing to stop them heading further up the M9 to Falkirk setting up another base there..

Good luck with that, LCB can't even get a decent Weekly ticket on the go, the locals in Falkirk are more peed off about old higher costs. I say let LCB set up a base in Falkirk and watch them go bankrupt..

 

[TheManWho]

Your missing the bigger picture, this isnt about making lots of money, It's about hitting Lothian where it hurts.

First is a business, therefore First will be wanting to make some money out of this venture.

 

[overthewater]

That is not the end game here, Im still surprised how people can't see what or why First has done this.

 

[CM]

That is not the end game here, Im still surprised how people can't see what or why First has done this.

Of course it's the end game, that's the whole point of running buses, to make money. They're hardly doing it for a bit of a giggle are they?!

 

[TheManWho]

Of course it's the end game, that's the whole point of running buses, to make money. They're hardly doing it for a bit of a giggle are they?!

But surely the big bosses at First are sitting in their board room thinking "well this is going to be good for a laugh. This will show them not to mess with us. Don't care how much money it doesn't make- this will teach them not to turn up on our patch with smart looking buses that some people are saying ain't making any money"

 

[CM]

But surely the big bosses at First are sitting in their board room thinking "well this is going to be good for a laugh. This will show them not to mess with us. Don't care how much money it doesn't make- this will teach them not to turn up on our patch with smart looking buses that some people are saying ain't making any money"

Aye, right, there going to be sitting in their boardroom giving it "lets annoy lothian on the tours for a giggle, it doesn't matter if we make money or not, that's not the aim".............be realistic......

 

[TheGrandWazoo]

Of course it's the end game, that's the whole point of running buses, to make money. They're hardly doing it for a bit of a giggle are they?!

Yeah, but in this instance, they may well be happy to hurt Lothian so that they decide the attractions of West Lothian aren't worth what they may lose on the open top tours.

I agree with WL reaching saturation, if Lothian did want to retaliate and hurt First further, nothing to stop them heading further up the M9 to Falkirk setting up another base there.

Yes - First have typically done okay at competing with the smaller independents i.e. Webber Bus / Crosville etc, but aren't good at competing with the larger operators with money behind them.

Saying that, come Thurs, it could be the final nail in the coffin for FGP as we know it....

All true but they may be taking the view that if they don't face this down, then what next? And from whom?

If Lothian fancied moving up to Falkirk, then again they'd have the start up costs and First would have the benefit of being the incumbent, and again, I'd doubt it's an area that can sustain two operators.

Take your view on Webberbus etc but they have done a bit of a job on Go Ahead in the East (though could be argued that was more suicidal from GA)

 

[winston270twm]

Good luck with that, LCB can't even get a decent Weekly ticket on the go, the locals in Falkirk are more peed off about old higher costs. I say let LCB set up a base in Falkirk and watch them go bankrupt..

Yes of course Lothian would go bankrupt in the 'unlikely' event they started up in Falkirk, they could just set-up a low start-up cost operation using an elderly fleet undercutting the established operator... I'm sure someone else has recently come up with that blinder......hmmm

 

[winston270twm]

But surely the big bosses at First are sitting in their board room thinking "well this is going to be good for a laugh. This will show them not to mess with us. Don't care how much money it doesn't make- this will teach them not to turn up on our patch with smart looking buses that some people are saying ain't making any money"

I think the big bosses at First are more concerned with which one will be clearing their desks first (excuse the pun)….

 

[overthewater]

Yes of course Lothian would go bankrupt in the 'unlikely' event they started up in Falkirk, they could just set-up a low start-up cost operation using an elderly fleet undercutting the established operator... I'm sure someone else has recently come up with that blinder......hmmm

I said LCB not lothian. Also undercutting, yet LCB not even doing that in West Lothian yet.....

 

[CM]

I said LCB not lothian. Also undercutting, yet LCB not even doing that in West Lothian yet.....

LCB is part of Lothian, there's nothing wrong with saying Lothian instead of LCB....

 

[overthewater]

Technically it's separate company going by Companies House.

 

[winston270twm]

Technically it's separate company going by Companies House.

It may well be, but who said it would be 'LCB' who would venture up the M9 to Falkirk, I said 'Lothian' being the parent company of all ops.

If it had the prospect of being a big risk / losing Lothian a fortune, you would set it up as sperate entity from all the others.

 

[CM]

Technically it's separate company going by Companies House.

It's still part of Lothian regardles.......

 

[Volvodart]

It's still part of Lothian regardles.......

It just means like the 43, any Lothian registered services profits or losses are hidden in the Lothian accounts rather than being evident in the Lothian Country accounts or any other company set up.

 

[In Focus]

But surely the big bosses at First are sitting in their board room thinking "well this is going to be good for a laugh. This will show them not to mess with us. Don't care how much money it doesn't make- this will teach them not to turn up on our patch with smart looking buses that some people are saying ain't making any money"

Not just saying , they are losing a fortune .
Wont see accounts until later in the year though , handy that ...

 

[In Focus]

I think the big bosses at First are more concerned with which one will be clearing their desks first (excuse the pun)….

Life will go on whoever clears their desk .