First bus to withdraw routes in East Lothian

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Greenback

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First Bus seem to be contracting at the moment My own view, based on a chat I had a while back with an insider, is that the decision to withdraw routes does not mean that they are unprofitable, it may only mean that are insufficiently profitable to maintain share prices.

First will seek to maintain and improve the share price. The price is dependent on financial results which are revelaed at various time sduring the year. Should profits be slightly lower then expected, then in order for investor confidence to remain high, the company needs to be seen to be taking action to address this.

One of the ways they can do this is to pull out from any routes that do not provide a certain percentage of return on capital. my contact declared this to be 8%, but did not know whether this was merely a local figure or one that applied nationally, However, I am convinced that the principle is correct whatebver the actual % amount might be.

Another bus operator, perhaps one that is not constarined by the same external pressures as a company on the stock market, may well be happy with a route that is profitable with a 3 or 4% return on investment. On the othe rhand, if the routes are not making any money it's difficult to see how any other company will step in on a commercial basis.

Isn't it great having transport that is subject to the whims of market forces!
 

Schnellzug

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I notice that according to the First Bus Company,
First Bus, Britain’s leading bus operator, has appointed a new Regional Commercial Director for its Scottish operations. Kevin Belfield will join the company at the end of April from Midlands based, The Wellglade Group.
http://www.firstgroup.com/ukbus/latest_news/?id=008221
Maybe they've been taking a look and tidying up before he starts in the job.
 

bluenoxid

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Another bus operator, perhaps one that is not constarined by the same external pressures as a company on the stock market, may well be happy with a route that is profitable with a 3 or 4% return on investment. On the othe rhand, if the routes are not making any money it's difficult to see how any other company will step in on a commercial basis.

Isn't it great having transport that is subject to the whims of market forces!

Sorry, just going to be a bit pedantic here

Any route makes money as soon as a passenger gets on board. It is just that some routes can be operated slightly differently (older buses, cheaper workforce, small diversions) that can increase that to above a point that makes it feasible. In addition, it is not just the actual service but the services that a route connects into. If you lose the schools contract, the 0930 to 1430 bus you run between to make best use of resources can prove crippling.
 

tbtc

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the decision to withdraw routes does not mean that they are unprofitable, it may only mean that are insufficiently profitable to maintain share prices

That's the problem.

First have a pretty high profit margin (partly due to the need to keep feeding money to shareholders to keep their investment), meaning they have had to pull a number of routes that were previously profitable for the operator that they took over.

Odd that they are going for a scorched earth policy in East Lothian/ Midlothian rather than trying to flog it to *anyone*, but I guess the market isn't there for anyone to just jump in and take over.

Good news for Lothian Buses, and their superior product, who cover almost all of the busier routes that are being withdrawn, but it does make me wonder what other areas of First will get the chop (if ten minute urban services like the 44 and 86 aren't doing well enough then what chance some of the rural operations?)
 

Greenback

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Sorry, just going to be a bit pedantic here

Any route makes money as soon as a passenger gets on board. It is just that some routes can be operated slightly differently (older buses, cheaper workforce, small diversions) that can increase that to above a point that makes it feasible. In addition, it is not just the actual service but the services that a route connects into. If you lose the schools contract, the 0930 to 1430 bus you run between to make best use of resources can prove crippling.

Perhaps I should have used the term making a profit instead of making any money! I'm sure everyone knows that any company will need to cover its costs to make running a route worthwhile without any subsidy.

The main point with First is that the bean counters will prefer to move their assets around to more profitable routes/areas or sell them off rather than see their proft margins fall.

That's the problem.

First have a pretty high profit margin (partly due to the need to keep feeding money to shareholders to keep their investment), meaning they have had to pull a number of routes that were previously profitable for the operator that they took over.

Odd that they are going for a scorched earth policy in East Lothian/ Midlothian rather than trying to flog it to *anyone*, but I guess the market isn't there for anyone to just jump in and take over.

Good news for Lothian Buses, and their superior product, who cover almost all of the busier routes that are being withdrawn, but it does make me wonder what other areas of First will get the chop (if ten minute urban services like the 44 and 86 aren't doing well enough then what chance some of the rural operations?)

First Cymru has certainly seen some retrenchment in the last couple of years, which was one of the things that led to the conversation I referred to earlier. South Wales Transport (Neath) and some small West Wales operators have stepped in or taken over in some places, presumably because they are happier than First with smaller profit margins.

I'm not sure, but the profits on some rural routes may actually be better than urban ones. The fares may be higher, and operating costs actually lower in terms of fuel consumption and wear and tear due to the different driving conditions. Loading smay also be better if the bus is the only real public transport available, as opposed to urban areas where there may be competition from other routes, companies and taxis.
 

anthony263

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Perhaps I should have used the term making a profit instead of making any money! I'm sure everyone knows that any company will need to cover its costs to make running a route worthwhile without any subsidy.

The main point with First is that the bean counters will prefer to move their assets around to more profitable routes/areas or sell them off rather than see their proft margins fall.



First Cymru has certainly seen some retrenchment in the last couple of years, which was one of the things that led to the conversation I referred to earlier. South Wales Transport (Neath) and some small West Wales operators have stepped in or taken over in some places, presumably because they are happier than First with smaller profit margins.

I'm not sure, but the profits on some rural routes may actually be better than urban ones. The fares may be higher, and operating costs actually lower in terms of fuel consumption and wear and tear due to the different driving conditions. Loading smay also be better if the bus is the only real public transport available, as opposed to urban areas where there may be competition from other routes, companies and taxis.

Yes you are correct Greenback and a certain other major group is casting its eyes towards Swansea and West Wales.

SWT too be honest have done very well in Neath especially with First reducing frequencies (The Neath - Cimla route is one such corridor where SWT have pulled off a upset against First which not many were expecting.)

Select Coaches are another operator who are due to launch a few new routes later this month and First have withdrawn their local bus routes operated out of the cardiff depot although I have wondered if they could have used a bus to extend the Bristol - Newport route to Cardiff however I doubt that would be profitable now.

I am waiting til this summer where Powys council have a few tenders for some major routes up for grabs the X63 Swansea - Brecon service being an example.
 

Schnellzug

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I do wonder if that might include the local branch around this way, which is completely isolated from the main part of Hampshire & Dorset. It would be nice to think that it might be sold to Stagecoach, although the other contender might be Go Ahead, which might be less desirable. Still, it's all hypothetical anyway.
 

Polarbear

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I would like to see First divest themselves of their operations in & around Chester. I'm sure some agreement could be reached with Arriva to take over these operations.
 

Blindtraveler

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much as this is sad news for the staff affected one of who I know well and also for the pax in areas now being cut off. On the other hand First have done many in this area a diservice for years and to have rid of them in some places may be a blessing.

Lothian could I think take over the gaps in the 44 including to Pencatland and Haddington and although they dont like Circles could easily run the 15 and 15a as circles extending from the QMU Campus to white craig, Dalkeith and on to Penicuik to join existing route.

As for the new ELT, a similas example D and G buses exists care of Dumfries and Galloway council so hope they learn from them. Its still a tall order though to get the company up and running before June. Wonder what they wil do vehicle wise?
 

bluenoxid

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much as this is sad news for the staff affected one of who I know well and also for the pax in areas now being cut off. On the other hand First have done many in this area a diservice for years and to have rid of them in some places may be a blessing.

Lothian could I think take over the gaps in the 44 including to Pencatland and Haddington and although they dont like Circles could easily run the 15 and 15a as circles extending from the QMU Campus to white craig, Dalkeith and on to Penicuik to join existing route.

As for the new ELT, a similas example D and G buses exists care of Dumfries and Galloway council so hope they learn from them. Its still a tall order though to get the company up and running before June. Wonder what they wil do vehicle wise?

How quick could they spin up a leasing deal? I assume that with a bit of poaching of managers and open advertising, they could get drivers. Just a depot to consider.
 

Schnellzug

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I would imagine that someone taking over from an existing operator would have no trouble signing up enough drivers from the current operator; i wouldn't expect that having just had the rug pulled from under their feet, they'd harbour too many feelings of loyalty to the First Bus. Likewise, I expect that they could lease enough reasonably modern vehicles (albeit almost certainly Solos, I expect :oops: ) virtually overnight.
 

Blindtraveler

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I would imagine that someone taking over from an existing operator would have no trouble signing up enough drivers from the current operator; i wouldn't expect that having just had the rug pulled from under their feet, they'd harbour too many feelings of loyalty to the First Bus. Likewise, I expect that they could lease enough reasonably modern vehicles (albeit almost certainly Solos, I expect :oops: ) virtually overnight.



you have a point, and Solos are all thats needed on most of the runs, hate them as many do. A few deckers would be handy too.
 

tbtc

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What real gaps will there be in the commercially run services?

The 44 and 86 have Lothian Buses equivalents (the 44 and a combination of the 3/33/49).

The Penicuik - Dalkeith - Mussleburgh corridor is a loss - is that a commercial route for First? LRT used to run that way with their 68 (?) twenty years ago - I'd expect that there was scope for something regular between Dalkeith and Mussleburgh at least.
 

Blindtraveler

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there are a number of Dalkeith to musselburgh runs the most popular being the one running via white craig etc. think if it was me id increase the 15s PVR, Divert it to serve highstreet in musselburgh and run it to Dalkeith and on to Pennicuik before returning to city via current route. 44c not running further than QMU is a pain as the X44s and X45s woant cope with the haddington to city loadings and are currently not low floor worked where as usually a few 44c vehicles are LF.
 

tbtc

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I take it nothing has been said yet about Lothian Buses' changes (if any) to deal with the absence of the 44/86 etc, and nothing said about the fleet disposal from First?

Presumably this would mean (for First) anything low floor cascaded elsewhere (which would mean the end for the Volvo B10Ms that run in West Lothian, ex South Yorkshire)?
 

Blindtraveler

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i would hope not as they stil have life in them and are in better shape than some of the LF darts at Mus. There are I think 15 or so LF Volvo Deckers at Dalkeith which are prity much exclusively used on the 86.
Theres Loads of volvo Olies which I guess may go to West Lothian, Glasgow or be sold on. Nothing said yet Re Lothian coming in to plut gaps but I hope they do.
 

overthewater

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Nothing has been sorted yet but watch this space as meetings did take place last week about what route Lothian would like to take over, since there had talks about buying the operations there know this was coming, so some background work already took place. Talk is most of the main routes should be taken over by Lothian: 44, 86 and 140. while everything else which are tender, will get put back out.

When it comes to the finances of First Edinburgh well its pretty poor:

* In the year to 26 March 2011, a pretax profit of £1.63m on a £49.1m turnover – a margin of 3.3%. The year before a £429,000 loss on a £49.4m turnover and every year before that is was making losses...

The company is not even getting 8%, and because most of the passengers use Lothian no one would buy operations. Its been also stated that the remaining routes at Musselburgh have 3 months to prove themselves or bye bye to them aswell. Livingston is also no better shape or profit than East/Mid Lothian but there chance are something would actually want to buy it.

Fleet will not be sold on, but half will be used to improve Falkirk, Stirling and Livingston depots which are all short of buses and are in badly in need in upgrading, which should kill off a good number of P, R and S Reg buses. other half will be sent scrappys along with the other recks.
 
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Oscar

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First will seek to maintain and improve the share price. The price is dependent on financial results which are revelaed at various time sduring the year. Should profits be slightly lower then expected, then in order for investor confidence to remain high, the company needs to be seen to be taking action to address this.

One of the ways they can do this is to pull out from any routes that do not provide a certain percentage of return on capital. my contact declared this to be 8%, but did not know whether this was merely a local figure or one that applied nationally, However, I am convinced that the principle is correct whatebver the actual % amount might be.

Interesting - this may explain what has happened in York over the last few years. First have given up virtually all of its less frequent bus routes (i.e. the ones which were generally less frequent than half hourly), all of its services which did not serve the city centre and many of its Sunday services. These services have been picked up by numerous other companies such as (now Veolia-)Transdev and York Pullman while First now basically runs a limited number of frequent routes between the city centre and suburbs. This thread seems to suggest that this pattern may be being replicated across First's bus networks, presumably to ensure that the value of the company's shares is high.
 

Blindtraveler

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and never mind the pax A? Long as the shareholders are smiling
Nothing has been sorted yet but watch this space as meetings did take place last week about what route Lothian would like to take over, since there had talks about buying the operations there know this was coming, so some background work already took place. Talk is most of the main routes should be taken over by Lothian: 44, 86 and 140. while everything else which are tender, will get put back out.

When it comes to the finances of First Edinburgh well its pretty poor:

* In the year to 26 March 2011, a pretax profit of £1.63m on a £49.1m turnover – a margin of 3.3%. The year before a £429,000 loss on a £49.4m turnover and every year before that is was making losses...

The company is not even getting 8%, and because most of the passengers use Lothian no one would buy operations. Its been also stated that the remaining routes at Musselburgh have 3 months to prove themselves or bye bye to them aswell. Livingston is also no better shape or profit than East/Mid Lothian but there chance are something would actually want to buy it.

Fleet will not be sold on, but half will be used to improve Falkirk, Stirling and Livingston depots which are all short of buses and are in badly in need in upgrading, which should kill off a good number of P, R and S Reg buses. other half will be sent scrappys along with the other recks.



god they must be desperate if they want it. What are we likely to keep and what wil go to Falkirk/livi/scrap?

Will wee lotìan going as far as Haddington? The tenders will easy get filled Id say. On finance wel I aint surprised.
 

overthewater

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and never mind the pax A? Long as the shareholders are smiling

god they must be desperate if they want it. What are we likely to keep and what wil go to Falkirk/livi/scrap?

Will wee Lothian going as far as Haddington? The tenders will easy get filled Id say. On finance well I aint surprised.

There is a major Fleet review shortly/JUNE, BUT this is in par with Gala also getting some new buses, I believe its somewhere between 10 - 20: Single deckers. Muss/North Berwick will kept 25 of the most useful buses in the depot. Alot of the current fleet will be sent for scrap, with about Best guess I can say would be 30 buses will be transferred? plus at least 10 from Gala. Hope is to get rid of anything P reg to get the company down to 15 year max, but well there still alot of R reg. You will see alot of fleet movements between now and end of June. Plan could be to take all the buses needed out and swap them and then do a cull at once.


Lothian going as far as Haddington? There a rumour, in which Lothian demand First rearrange the operations which first are doing, and lothian pick up the places. Then in 3 months first will sell off Muss depot with small section of routes, and Lothian will be able to transferee some city route in to the depot.
 
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overthewater

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well that all makes a digree of sense. Odd to think that some early low floor stuff wil go for scrap seeing as its roughly 15 years old. Id like to think the remaining runs from Mus wil stil work but agree it wil take a bit a doing.

I have to be honest a lot of the R Reg darts are in pretty poor states :|
 

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well that all makes a digree of sense. Odd to think that some early low floor stuff wil go for scrap seeing as its roughly 15 years old. Id like to think the remaining runs from Mus wil stil work but agree it wil take a bit a doing.

I have to be honest a lot of the R Reg darts are in pretty poor states :|

Oh, indeed, yes. If anything, I think the low floor ones don't last as long as the step entrance ones; they've always seemed more rattly.
 

mbonwick

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No surprises the early Dart SLFs haven't aged as well as the older step darts; the bodies for them were just modified step bodies, bodged to fit.

You're looking for at least T reg before proper bodies designed for the low floor chassis arrived on the scene.
 
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