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The rapid decline of Bournemouth’s Yellow Buses network
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markymark2000
Established Member
So they can buy another operation and lose all the work a month later? Surely their fingers must be burned with Johnson's.
May I draw to your attention my earlier post (quoted above).
Allowing GA to purchase and restructure the combined network would surely be a sensible move in the interests of the consumer?
TheGrandWazoo
Veteran Member
Rotala grow by acquisition; I can't recall much in the way of organic growth before Covid, let alone since.
To be fair, they've generally done well with acquisitions (though Bolton was very poor operationally for 6 months post transfer). They have the financial headroom for other purchases and as their chairman said in the annual report
However, the purchase of the Johnsons work was rather strange as it was virtually all tendered with the risk of losing it, which is what happened. Spending all that time and effort to essentially buy some secondhand vehicles looks stupid now but I guess they felt they could accommodate it into Redditch. Thing was, Stagecoach could do the same with Stratford and Warwick which was much more convenient!
You could've made the same argument about Plymouth when First sold to Stagecoach.
Administrators have to act in the best interests of the shareholders, so,doubt they would sell it for a £1.
The modern stock, is it owned, leased or rented. If it is owned, fair value for the stock will have to be given in any sale, or they will be sold separately. If the are leased or rented, sure the owners have already started the recovery process.
Sad for customers but particularly for the staff who face considerable uncertainty.
I think the potential buyer may be NEX, who would see considerable synergy on the coaching side. First is possible (Marc Reddy lives in Bournemouth and is ex Yellows) as is Stagecoach.
Or Go Ahead wait till YB go into receivership, take on some of the staff, buy the better vehicles from the receiver and rationalise the Yellows services into theirs. In which event be very very afraid about fare rises to the eye watering levels seen elsewhere in GSC....
Hadn't thought about Rotala. Now that would be interesting. I think they might give GSC a run for their money; they have done a decent job in Bolton and Diamond WM is definitely improving.
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Anthony ross
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To be honest I can’t see stagecoach being interested given the fact there now owned by a asset stripping company
I confess I hadn't thought about Rotala / Diamond either. Maybe?
Having looked at the latest Yellow Buses accounts (March 2021) it looks like 75% of the fleet is on HP with some chunky payments still to be made. The last results showed a good profit but this came mainly from (1) 'amortisation' of negative goodwill - a really weird one but not a 'proper' profit - it never turns into cash; (2) a decent credit from one of the pension schemes, this is accounting mumbo jumbo too and isn't cash, indeed the scheme in question is still in deficit. There is a note in there about an exit charge when the company no longer has any active members in the Dorset Council scheme - and as anyone in it is pre-1986 and the contributions are now very low - that could be soon and it could be £1.7m. As well as the Dorset scheme the company has its own closed scheme (up to 2014) which is in surplus - but no offset would be permissible. Potentially very messy.
So maybe the company will not survive, someone (eg More) might take on some routes, the administrator/ HP company sell off the fleet to the highest bidder - if there's some decent stuff going cheap I can imagine interest from all over the country for replacement of old stuff - TUPE some staff perhaps and a rather sad closure. Perhaps, hopefully not!
Having looked at the latest Yellow Buses accounts (March 2021) it looks like 75% of the fleet is on HP with some chunky payments still to be made. The last results showed a good profit but this came mainly from (1) 'amortisation' of negative goodwill - a really weird one but not a 'proper' profit - it never turns into cash; (2) a decent credit from one of the pension schemes, this is accounting mumbo jumbo too and isn't cash, indeed the scheme in question is still in deficit. There is a note in there about an exit charge when the company no longer has any active members in the Dorset Council scheme - and as anyone in it is pre-1986 and the contributions are now very low - that could be soon and it could be £1.7m. As well as the Dorset scheme the company has its own closed scheme (up to 2014) which is in surplus - but no offset would be permissible. Potentially very messy.
So maybe the company will not survive, someone (eg More) might take on some routes, the administrator/ HP company sell off the fleet to the highest bidder - if there's some decent stuff going cheap I can imagine interest from all over the country for replacement of old stuff - TUPE some staff perhaps and a rather sad closure. Perhaps, hopefully not!
I can’t really see much that a potential buyer would be interested in other than the Castlepoint garage but that’s probably leased?
Go Ahead would be the obvious choice to run the services not covered by their network, mainly Christchurch and given that Bournemouth and Poole Council have an ‘Enhanced Partnership’ with operators , plus the relaxation of competition ’rules’ of the Bus Services Act 2017, it might well be a viable proposal.
Go Ahead would be the obvious choice to run the services not covered by their network, mainly Christchurch and given that Bournemouth and Poole Council have an ‘Enhanced Partnership’ with operators , plus the relaxation of competition ’rules’ of the Bus Services Act 2017, it might well be a viable proposal.
Robertj21a
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The company possibly interested in taking over is reported to have now declined to proceed further.
Hadn't thought about Rotala. Now that would be interesting. I think they might give GSC a run for their money; they have done a decent job in Bolton and Diamond WM is definitely improving.
I’d argue the same for any other city within Great Britain.
We’re at a point now where bus usage has declined so much that it’s no longer viable to have competition on the road. What we need to do is move to a London-style franchising model where every major town/city and its hinterland has their own unified network, with a single brand identity and ticketing across the board. Private operators can still bid for routes, but apart from that, the only other competition for buses will be private transport.
I agree. So long as the fares are controlled by the LTA/PTE.
My fear with a GA takeover of YB has always been them taking advantage of their monopoly to jack prices up (Isle of Wight style).
That's a really good analysis of their last results. Anyone would think they were window-dressing in advance of a possible sale........
Their fleet is decent enough. Some fairly elderly Volvo deckers in front line service but that aside not too much more than 10 years old.
The depot is leased and looks to be quite a chunky cost. Note that in 2020/21 they received a huge amount shows as ‘government grants’, presumably furlough money. This had to be replaced by real income now. Very strange increase in prepayments too in 2020/21, all in all the big profit that year still turned into a significant reduction in cash.
While it’s true that this is something to worry about, a merger doesn’t necessarily mean Morebus will jack their prices up. Think about it this way, if there was only one monopoly supermarket chain in the UK and they hiked prices up to whatever they like, they wouldn’t lose customers as there would be no alternative place for them to buy essentials to meet basic human survival needs, despite them being rightly annoyed at the situation. On the other hand, if a monopoly bus company did the same, they would lose customers as the competition will always still be there, albeit in the form of the car. Bus companies thinking about hiking fares do need to consider the consequences of doing so in areas where private vehicles are easy to obtain and utilise, so any operator that can see the bigger picture might put off fare rises for this reason.
One thing to remember with Southern Vectis regarding its higher fares is that they don’t have much competition from the car, because the demographic on the island is much less likely to own one in the first place. Islanders are happy to pay the higher fares in compensation, and the additional tourist income in summer helps too.
If the CMA forced Go Ahead to not increase fares above the rate of inflation for say 5 years, then that might be an option.
There's an awful lot of cars on the Island, most of them trying to get in and out of Newport. Not sure I buy that explanation.
GSC also have form for driving other operators off the road (remember Beep Bus?).
What I can't fathom is why this has happened now. I fear they will lose staff quickly and have nothing left worth buying in today's job market.
I would think a massive driver exodus would happen over the next 2 weeks and killing what was left of yellows.
miklcct
On Moderation
If Go South Coast had a monopoly in Bournemouth & Poole, the inevitable outcome will be like Isle of Wight.
There is virtually no competition to buses in that area as now SWR is only operating so few trains in the region (if it operates 3 stopping trains per hour, than it will become a strong competitor to buses along the corridor).
Private cars and taxis are luxury items that serve a different demographic compared to trains and buses. They don't represent a competition to local buses.
It is true that island roads do get congested often, a notable example being Coppins Bridge. Generally though this is as a result of the roads being of a low standard, rather than high volumes of traffic as seen on the mainland.
Not everyone who drives is on a £40K+ salary. Many low wage workers need their cars as the public transport doesn’t get them where they need to be when they need to be.
The vast majority of the country only has one main operator in each town* so it’s not a given that it means the fares will be hiked up to silly levels.
* most places have one main network operator with maybe others running in from outside or running minor tenders. It’s fairly rare to have two operators running major commercial networks in the same town
* most places have one main network operator with maybe others running in from outside or running minor tenders. It’s fairly rare to have two operators running major commercial networks in the same town
It’s not that uncommon to have multiple operators each running their own network of services within a single town/city.
For example we have:
- Bournemouth (Go-Ahead and Yellow Buses)
- Southampton (Go-Ahead and First)
- Portsmouth (First and Stagecoach)
- Swindon (Go-Ahead and Stagecoach
- Oxford (Go-Ahead and Stagecoach)
They've owned it before...
Is it actually a going concern (or could it easily be made into a going concern)? If not, why would anyone want to buy it?
The sort of issues to consider are whether there are any high wages or restrictive practices which could frustrate any profit being made. It was a management buy out, so hopefully, any issues such as these would have been sorted.
Another hat to throw into the ring: HCT? They have invested in many fleets up and down the country, but it does depend on my first point - is it possible to make a profit.
The sort of issues to consider are whether there are any high wages or restrictive practices which could frustrate any profit being made. It was a management buy out, so hopefully, any issues such as these would have been sorted.
Another hat to throw into the ring: HCT? They have invested in many fleets up and down the country, but it does depend on my first point - is it possible to make a profit.
Stan Drews
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The management buyout was a brave move, and considering that was pre-pandemic, I think any realistic chance of turning it round will be very difficult in the current climate. There's every chance that existing staff could be enticed to other local employers due to the uncertainty, which would put even more pressure on the business if they haemorrhage drivers etc. Whilst the competition authorities might think otherwise, I believe Go Ahead would offer the best solution for the area going forward.
DelayRepay
Established Member
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It's not just cars they need to think about - some passengers making short trips might walk, or cycle, or manage to get a lift. Others (especially leisure travellers) might decide not to travel at all. Groups of passengers (e.g. employees going to work at a similar time) might work out that a shared taxi is cheaper (or at least no more expensive and more flexible). So yes, a single operator monopoly doesn't automatically mean fares will rise significantly.
There will presumably be savings as the combined company should have lower overheads e.g. through removing duplicate routes and combining depot and back office functions. This may negate the need for an immediate price increase following any merger.
It's not just cars they need to think about - some passengers making short trips might walk, or cycle, or manage to get a lift. Others (especially leisure travellers) might decide not to travel at all. Groups of passengers (e.g. employees going to work at a similar time) might work out that a shared taxi is cheaper (or at least no more expensive and more flexible). So yes, a single operator monopoly doesn't automatically mean fares will rise significantly.
There will presumably be savings as the combined company should have lower overheads e.g. through removing duplicate routes and combining depot and back office functions. This may negate the need for an immediate price increase following any merger.
M803UYA
Member
Has been since 2015 when the Head of Network Development left - and then the commercial team left within a matter of months. The replacements, frankly, weren't up to the job. I was away 13 months and when I was enticed back suffice to say the damage was done. The 2017 changes accelerated the issues as they tried to recover the situation. There were a lot of non driving staff in the operation, something that size should have been running c400 buses. And had some of RATP's acquisitions taken place it would have been.
I'd put money on Stagecoach taking over - no surrounding network operation so no issues with Competition and Markets Authority - can be run from Chichester with a modest increase in head office staff there. Same with Exeter overseeing it - it's closer to Chichester with that operating company running into Salisbury.
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