^ But to what extent does the subsiding of OAP fares impact on the whole network?
I find a lot of bus routes are geared towards the free pensioner travel market, to a point it makes the service unattractive to other users. At present, I have a bus route from my front door to my place of work, but with low frequencies and restrictive journey times I am unable to use it. For a start, the first journey gets into my work 24 minutes after I'm meant to start, and the last bus back leaves 15 minutes before my shift finishes! And this has been quite common on many bus routes I've tried to use - it's often impossible to work it around many reasonable commutes (certainly outwith big cities).
I would hypothesise that the bus companies are running the routes primarily to serve the OAP market, which is where they make all their money, at the expense of younger passengers, and as a result the services become more centred on this market (which is a natural progression). There's plenty of bus routes that exist purely to ferry old ladies to the supermarket/shops, but they don't run at times to allow the employees to get to work! As such, the OAP market gets bigger, and buses become an increasing irrelevance for those of us outwith major cities. I often post that I really have tried to commute on buses (really, I have) but I am simply unable to do so.
It also leaves bus companies in the position that they rely on the pensioners, to the point that their business would collapse if they couldn't provide subsidised travel (IIRC, a company in Airdrie had their bus pass privileges withdrawn because of abuse, and they shut down pretty much overnight).
Graham's absolutely right. The 60p fares (or whatever indicative number you choose) may not be making the bus companies a lot of money, but we are now in a position that they are usually the main revenue stream for bus companies, and withdrawing them will not see fare paying passengers take up the slack.