The rapid decline of Bournemouth’s Yellow Buses network

[RELL6L]

I don't they would be exposed to interest rate rises. Most of the buses are leased but the payments for these will be fixed and not dependent on interest rate movements. There is about £700k per year to pay on these and another £700k to pay on other leases - which probably includes the property. If the company went under then most vehicles would be taken back by their leasing company owners who would try and sell them to the highest bidder. There's no reason why a bidder who wants them to run services in Bournemouth would have any advantage over any other bidder. For example Arriva might see these as a good opportunity to rid themselves of some old dross anywhere in the country.

It is surprising that they have gone under in the school summer holidays which you would think would be the best time. But perhaps the cash has simply run out.
I do suspect pensions may be underlying the problem, but this could be a red herring.

MoreBus taking over would no doubt result in the Competitions and Markets Authority taking an interest since there is existing competition. But if there isn't any other bidder then the only alternative would be the business closing, MoreBus registering whatever routes they want (or none) and taking on some staff, probably not by way of TUPE. This may well happen but I don't think the CMA would stand in the way of MoreBus taking over the business if that was the only option, although they would much prefer someone else. Yes things were stupid in Barnstaple and Plymouth but in neither case did the company withdrawing (First) go into admini9stration.

 

[PTR 444]

So if Yellow Buses closes down having been unsuccessful in finding a buyer, would MoreBus (presumably having taken on all or some of YB’s fleet, routes and staff) be allowed to incorporate yellow into their branding as a nod to Bournemouth’s heritage?

 

[M803UYA]

I spoke to a Yellow Buses driver (the B5TL Gemini 3 on the 5 precisely) and he said, rule out morebus taking over YB. They are not allowed to do that due to franchising laws etc.

I think you mean competition laws. If Go Ahead was to take over, the purchase would be referred to the Competition & Markets Authority for investigation. As the two operators compete head to head that is a highly likely scenario. It'd be easier for Go Ahead to find 20-25 buses and register the 5a/5b (this being the one route they don't currently service) to replace Yellow Buses. Other routes might need some sort of replacement - but even doing this would fall foul of competition law as you'd be defined by them as taking on the whole business. There are established precedents with takeovers which would mean the purchase being referred, with possible divestment/sale as one outcome.

It's interesting to see the view from inside.

Do you think that if we'd not had the pandemic and everything that followed, they would have been able to turn things around?

I think that'd be a highly likely outcome. They've called in the administrators just after the end of the school year. Around 10 or so of the double decker fleet are engaged on school work (commercial and tendered). So the revenues from that aren't there during the 6 week summer break. In theory that's replaced by lots of holiday makers and day trippers but overall you need less buses.
It's clear by 2019 RATP weren't prepared to tolerate a loss making situation. We were always told that RATP eliminates loss making operations. In some respects Yellows was unusual in being a commercial bus operation in the group. Besides Bath Bus Company, all their other UK operations were geared to contract operation (National Express in case of Selwyns and TfL with Epsom/London United). So RATP divesting Yellows was not a surprise - the management clearly had confidence in the business to take it on from them. The statement from the administrators states they'd been looking to find a new owner for the operation for some time, which also is a not a surprise. If you go back to the 1980s National Bus Company privatisation process most of the management buyouts sold on within 10 years to one of the big 5 bus groups.

 

[BenS123]

News on the potential buyer should be on the yellow buses "by the end of the week" according to a Yellow Bus employee I spoke to earlier

 

[Mainline421]

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....

Hopefully this doesn't happen but that would makes sense for GSC. The fares are already high for urban bus travel though. I don't use them often these days, but last time I did I overheard multiple comments about this from passengers. I'd guess National Express most likely to be interested, if only the council would buy it back...

Surprised I didn't see this coming with hindsight. Hopefully the area isn't left without competition, and whoever buys it keeps the Yellow, it's as iconic in Bournemouth as red is in London for some.

 

[MotCO]

I think you mean competition laws. If Go Ahead was to take over, the purchase would be referred to the Competition & Markets Authority for investigation. As the two operators compete head to head that is a highly likely scenario. It'd be easier for Go Ahead to find 20-25 buses and register the 5a/5b (this being the one route they don't currently service) to replace Yellow Buses. Other routes might need some sort of replacement - but even doing this would fall foul of competition law as you'd be defined by them as taking on the whole business. There are established precedents with takeovers which would mean the purchase being referred, with possible divestment/sale as one outcome.


I think that'd be a highly likely outcome. They've called in the administrators just after the end of the school year. Around 10 or so of the double decker fleet are engaged on school work (commercial and tendered). So the revenues from that aren't there during the 6 week summer break. In theory that's replaced by lots of holiday makers and day trippers but overall you need less buses.
It's clear by 2019 RATP weren't prepared to tolerate a loss making situation. We were always told that RATP eliminates loss making operations. In some respects Yellows was unusual in being a commercial bus operation in the group. Besides Bath Bus Company, all their other UK operations were geared to contract operation (National Express in case of Selwyns and TfL with Epsom/London United). So RATP divesting Yellows was not a surprise - the management clearly had confidence in the business to take it on from them. The statement from the administrators states they'd been looking to find a new owner for the operation for some time, which also is a not a surprise. If you go back to the 1980s National Bus Company privatisation process most of the management buyouts sold on within 10 years to one of the big 5 bus groups.

Maybe the management buy out did not have enough working capital, or be able to call upon sufficient working capital being a relatively small operation.

 

[Dorsetbus]

I keep hearing that Yellow Buds have until Friday for the sale to happen.

 

[Simon75]

Am I right in that didn't Stagecoach buy 2 operators in Eastbourne, one which was going bust, thus having a monopoly ?

 

[Cesarcollie]

Keep hearing that yellows have until friday for the sale to happen.

There is no legal deadline. The administrators will make a balanced judgment based on costs of keeping going vs likely chance of a sale.

 

[Dorsetbus]

There is no legal deadline. The administrators will make a balanced judgment based on costs of keeping going vs likely chance of a sale.

I believe thats the decision that's been made. Their drivers are expecting an answer on Friday, one way or another.

 

[M803UYA]

I believe thats the decision that's been made. Their drivers are expecting an answer on Friday, one way or another.

The administrators haven't been notified to companies house yet - that appears to be premature if they're working to this Friday. I find that a little far fetched. If there's a buyer and they're on the verge of completing, then that process would run to the end. If you look at football clubs going into administration that process can take a long time - best part of 12 months.
If you look on companies house the length of time bus companies spend in administration can run into years from date of appointment to final dissolution of the business.

To give a comparison - Sureline in Weymouth stopped running in 2009 and ever since has been in suspended animation - it's not filed accounts but remains live as a company. The order of the court to wind up is dated 2011 but it still hasn't been wound up.

 

[markymark2000]

Simon Dunn, CEO of Rotala, has said on WMBusForum that Rotala are not interested in this opportunity.

Yellow Buses

Yellow Buses

wmbusphotos.com

Rotala are not interested in this opportunity. It is not about money, or desire. The situation they find themselves is sad. However, in the best markets there are 15% less passengers (pre-COVID the best businesses delivered 10% margins), and escalating operating costs way above the stated inflation all transport businesses will face challenges. A few months back I wrote an article to the DfT, Route One covered this recently and in this article I warned of what was coming.

What I would say is that I understand this business does operate National Express contracts and did or still does operate contracts for Megabus as well.

 

[E-Rail]

It is unclear if Yellow Coaches, with it's separate O licence is also in administration. I understand it is a stand alone company with common ownership and not a subsidiary of Bournemouth Transport Ltd. I also understand it is this company that holds the NX, Megabus, BCP and Dorset council contracts.

I think the reports of Friday being D day relate the volume of fuel remaining in stock.

 

[M803UYA]

It is unclear if Yellow Coaches, with it's separate O licence is also in administration. I understand it is a stand alone company with common ownership and not a subsidiary of Bournemouth Transport Ltd. I also understand it is this company that holds the NX, Megabus, BCP and Dorset council contracts.

I think the reports of Friday being D day relate the volume of fuel remaining in stock.

The contracts were held by Bournemouth Transport Ltd when I worked in the business - but post 2019 that might well be different. Certainly the council contracted services were run by the bus operation as opposed to the coach operation.
Yellow Coaches has been set up as a company post 2019 - before that it was a trading name loosely used for the National Express operations. These were run under a 'coaching' section with the manger of the training school having day to day responsibility and it's own team of supervisors.
Going a lot further back to the council days the coach operation was very much separate - Dorset Travel Services was taken over 1992 from National Express and has it's origins in the old Shamrock & Rambler operation - this was where the 035 National Express diagrams came from. The operation did do proper coach work alongside it but in the early 2000s it was given up to focus on the National Express work.
This expanded under RATP control with the addition of the 032 work from Southampton around 2011. We were always aware Lucketts quite fancied the work for themselves though the loss of the 032 (to Go South Coast surprisingly) was one of the nails in the coffin. The 2011 coaches remained on lease, just with no work to replace them with. Megabus wasn't an option, at that time, but we did make use of the surplus vehicles on scheduled duplicate work for National Express as well as establishing what is now Yellow Coaches in the private hire field. This however has taken a number of years to grow, as one might expect in a 'new' business.

 

[Western Sunset]

My experiences from this morning. I live on the extremity of route 6 with a (supposedly) hourly service.

Got to bus stop - waited for half an hour but no bus shows. Do I wait longer, go home and get the car, or walk half a mile or so and get a More bus? I make the latter option and get to the bus stop just as a More on route 4 is approaching.

I get the More bus home. There's someone teaching the driver the ins and outs of the route. I have a chat with him and he tells me:
1. More won't take over Yellows
2. Decision on Friday - otherwise "buses will be locked in the depot"
3. Three new drivers have joined More this week (from Yellows), and others are in contact with More to join them

 

[Dorsetbus]

The administrators haven't been notified to companies house yet - that appears to be premature if they're working to this Friday. I find that a little far fetched. If there's a buyer and they're on the verge of completing, then that process would run to the end. If you look at football clubs going into administration that process can take a long time - best part of 12 months.
If you look on companies house the length of time bus companies spend in administration can run into years from date of appointment to final dissolution of the business.

To give a comparison - Sureline in Weymouth stopped running in 2009 and ever since has been in suspended animation - it's not filed accounts but remains live as a company. The order of the court to wind up is dated 2011 but it still hasn't been wound up.

Well as of tomorrow the drivers will be operating emergency schedules due to the current circumstances.

I don't see them having years to fix this.

 

[E-Rail]

Morebus was already experiencing severe driver shortages before this happened. It is also not profitable currently and a further round of service cuts were due in the autumn. More currently has a large number of Go Ahead London drivers on loan to minimise lost mileage. Anybody who thinks that Morebus will simply pick up the slack from the disappearance of Yellow is in for a shock.

 

[Hophead]

How much do the More & Yellow networks overlap? While there are undoubtedly insufficient drivers over both companies, there must be a much better likelihood of properly resourcing a single, consolidated, network.

 

[E-Rail]

I think More could be in trouble after this. If a major group does step in, they will likely want to take back their historic patches east of Bournemouth on the m1/m2. I can't see the likes of Stagecoach leaving the Poole corridor alone and allowing the m1/m2 to continue freely roaming through to Southbourne and Castlepoint.

If competition does break out, I can see More being on the losing foot. It's not a national brand and in a town with a highly transient population and huge visitor numbers, their local identity, unknown to anybody outside the area, could quickly become their downfall.

How much do the More & Yellow networks overlap? While there are undoubtedly insufficient drivers over both companies, there must be a much better likelihood of properly resourcing a single, consolidated, network.

As far as drivers are concerned, most are waiting to find out how much Amazon are prepared to pay for the 600+ drivers they will require at their new Poole hub in the autumn. The current shortages are likely to be the tip of the iceberg. There is the very real possibility that the local bus network is about to be decimated by a mass exodus of staff from both Go South Coast and Yellows.

 

[PTR 444]

How much do the More & Yellow networks overlap? While there are undoubtedly insufficient drivers over both companies, there must be a much better likelihood of properly resourcing a single, consolidated, network.

Quite a bit, but generally in a suburban area like Winton or Kinson, Yellow Buses will operate to Bournemouth while More operate to Poole. The loss of Yellow Buses without anyone stepping in would mean several areas (West Howe, Kinson, Bearwood etc) have a service to Poole, but not Bournemouth which would be absurd considering the latter is the more prominent town.

 

[jammy36]

There is no legal deadline. The administrators will make a balanced judgment based on costs of keeping going vs likely chance of a sale.

The Friday deadline is being bandied about from a number of sources, but as @Cesarcollie notes there is no legal deadline.

What I think can safely be deduced is that Yellow Buses has been under significant financial pressure for some time and the current directors have been actively seeking to sell the business. Seemingly this sale hasn’t been concluded swiftly enough for the company’s creditors. It looks like any goodwill has been eaten up and the creditors have decided enough is enough. The company directors have judged the company to be insolvent and therefore sought to protect the business by seeking to appoint administrators so that the sale process might be completed.

Administration legally protects the company and its assets and the administrators have assumed responsibility for the management of the company. Administration is a robust tool, but can’t be used willy-nilly. The administrators must effectively ascertain that there is 1) realistic potential for a route out of administration (i.e. that the company can be rescued as a going concern) and 2) that entering administration would be a better outcome for the company’s creditors than going straight for winding-up/liquidation.

The statements published mention that negotiations for a sale are at the 'final stages', but it doesn’t seem that the sale is yet-agreed – i.e. we’re not looking at a “pre-pack administration”.

So where might the Friday deadline come from… and this is speculation… reading between the lines it is possible that a major supplier (mention has been made of fuel, but it could be insurance, ticketing, etc) has effectively taken matters into their own hands by no longer servicing the business beyond that date. There is no obligation for a supplier to continue to do business with a company in administration, but as a creditor it may be in a company’s best interest to do so. If a supplier withdraws their services this might effectively place a deadline upon the administrators if it meant there were practical reasons why the company can no longer trade beyond a certain date – e.g. you can’t operate buses without fuel.

This would significantly alter the dynamic for the administrators. Finding a buyer and managing the administration process is a completely different ball-game once the company has ceased actively trading. In that scenario the administrator might judge that the criteria for being in administration can no longer be met, that there is no realistic chance of a sale once the business stops trading, and that creditors would be best served by the orderly shut-down and liquidation of the company’s assets.

So, while gut feeling is that Friday’s deadline seems to soon (and wouldn’t have given the administrators sufficient time to properly assess the business, put in an action/rescue plan and market the company), it is possible that a Friday deadline for completion of the sale has effectively been placed on the administrators by a major supplier – we’ll have to wait until Friday to see if that deadline is real, or simply to put pressure to expediate any sale.

 

[Snow1964]

My gut feeling is any deadline this Friday is one (or more) of following

1) No fuel, and no one will supply more unless prepaid as company in administration
2) A lease or rental due, (buses or property) which if not paid means the charge holder can lock the door, or seize the assets
3) A payroll problem, insufficient funds to pay weekly wages, so unpaid staff might start taking items as security
4) A stop order from traffic commissioner (loss of operating licence) because conditions to operate no longer apply
5) Loss of public liability insurance etc

Number 4 (Operating licence) requires a traffic manager, a named competent official. If the Directors have lost authority to the administrator then possibly no longer anyone in this position. I don’t know the rules but maybe only have a week to name a successor

 

[Morgsie]

I grew up in the area and remember things roughly 20 years ago where you had Wilts and Dorset and Yellow Buses as the main 2 bus srvices in the BCP area. You had 101-105 Wilts and Dorset Poole to Bournemouth and the YB Network was different as it served Tower Park and there was a Poole to Boscombe bus service via Alderney and Bournmouth University/Fern Barrow which has sincce been withdrawn. The reason why I mentioned the 101-105 fromer W&D services is that the current Poole to Bournemouth YB 1 services serves Bournemouth Rd, between Ashley Cross and Branksome only which was served by the 102 when it was W&D so what will happen to that and the current YB 18 srrvices which is the Broadstone to Bournemouth services via Upper Parkstone Ashley Rd? If I recall there was big fuss when More/W&D withdraw the Broadstone Bournemouth services which led to Yellows stepping in to run the service.

The posts about about the inside of Yellows I found interesting. As for the current position I am curious to know if a buyer is found and who and whhat will happen to current staff

 

[jammy36]

My gut feeling is any deadline this Friday is one (or more) of following

1) No fuel, and no one will supply more unless prepaid as company in administration
2) A lease or rental due, (buses or property) which if not paid means the charge holder can lock the door, or seize the assets
3) A payroll problem, insufficient funds to pay weekly wages, so unpaid staff might start taking items as security
4) A stop order from traffic commissioner (loss of operating licence) because conditions to operate no longer apply
5) Loss of public liability insurance etc

Number 4 (Operating licence) requires a traffic manager, a named competent official. If the Directors have lost authority to the administrator then possibly no longer anyone in this position. I don’t know the rules but maybe only have a week to name a successor

Option 2 is surely not possible and option 3 would be illegal. One of the whole points of administration is that it places a moratorium on the business that specifically prevents this. Being in administration places legal protection upon the company that means that landlords, creditors or asset-based lenders can't start legal proceedings, appoint bailiffs or otherwise seize assets or company property.

 

[PTR 444]

YB 18 srrvices which is the Broadstone to Bournemouth services via Upper Parkstone Ashley Rd? If I recall there was big fuss when More/W&D withdraw the Broadstone Bournemouth services which led to Yellows stepping in to run the service.

I thought Wilts & Dorset had simply lost the tender for that route to Yellows.

 

[Morgsie]

I thought Wilts & Dorset had simply lost the tender for that route to Yellows.

I'm not sure what happened to that specific route, I only remember it switched and thought there was a big fuss made at the time. I wonder what will happen to it?

 

[miklcct]

I'm delighted to see this rubbish bus company to fail.

Compared to morebus, its frequency is lower, its fare is higher, and its coverage is smaller. The buses are worse as well - the proportion of old buses in the fleet is higher, and none of the buses, even including new ones, have next stop announcements (in contrast, the new buses of morebus have next stop announcements). It still doesn't have contactless PAYG travel (one still has to buy a ticket) compared to morebus which offers tap on tap off.

I was fed up with this rubbish company that, on the final days in Bournemouth, I sometimes hired Beryl bikes for my travel despite riding a bike takes nearly double of the time compared to taking a bus (12 minutes by bike vs 6 minutes by bus for a 4 1/2 km journey).

The only bus route in this rubbish company which I used regularly was the 3x - when it operated direct between the hospital and the station. There were 2 scheduled buses on this route offering half-hourly frequency but often one of them disappeared (mostly due to crew shortage).

Furthermore, at that moment, the half-hourly 3x departed mostly at the same time as the competitor (also half hourly) in both bounds. I thought that this route would complement the competitor giving an average 15-minute headway between Lansdowne and the hospital but it didn't happen, and eventually morebus rewrote the timetable to give an average headway on their own services from hospital to Lansdowne when the A31 roadwork started.

Now Yellow Buses have lost the 3 completely. It's a pity that the m2 isn't extended to Christchurch at the same time as well to kill off the 1 as well.

 

[M803UYA]

My gut feeling is any deadline this Friday is one (or more) of following

1) No fuel, and no one will supply more unless prepaid as company in administration
2) A lease or rental due, (buses or property) which if not paid means the charge holder can lock the door, or seize the assets
3) A payroll problem, insufficient funds to pay weekly wages, so unpaid staff might start taking items as security
4) A stop order from traffic commissioner (loss of operating licence) because conditions to operate no longer apply
5) Loss of public liability insurance etc

Number 4 (Operating licence) requires a traffic manager, a named competent official. If the Directors have lost authority to the administrator then possibly no longer anyone in this position. I don’t know the rules but maybe only have a week to name a successor

With #3 the salaried staff are monthly paid (final Friday of the month) but the driving staff are weekly paid. There would be less income coming in as it is the school holidays, and this takes up a number of peak vehicle requirement (PVR) - those buses do offpeak work which remains in the holidays, but overall less mileage to cover and less call on the fuel stocks. The lost revenue would be offset by increases in summer holiday visitors to Bournemouth.
The big issue I see is the ending of Covid support grant (CBSSG) which would mean a loss of income. The population is what we term 'elderly' - so a lot of passengers who'd be travelling on concessionary passes. The very group which has stopped using the bus since 2020. Can you reliably predict the situation from September/October onwards on likely passenger usage?
A loss of a transport manager can be dealt with through notifying the traffic commissioner - you'd get a period of grace to deal with it. This can run into months.

 

[James H]

Service reductions from Wednesday:

https://www.yellowbuses.co.uk/august-service-changes

As of Wednesday 3rd of August, we will be reducing some routes to a Saturday service

New Forest Explorer, 727 and 6h withdrawn

Not listed on the above page, but Buster's Beach Bus is running on a reduced route according to YB's Facebook page

 

[Western Sunset]

I might've just made my last Yellows journey. I wished the driver well; he gave me a shrug of resignation.