Bus and Coach Operators

Bus and Coach Operators

The British market for scheduled bus and coach services (including concessionary fare reimbursements, but excluding public transport support) is estimated to have reached approximately £6.31bn in 2007/2008 — a 6% increase on the estimated figure for 2006/2007. Bus patronage in England continues to be driven by growth in London. Excluding London, only moderate growth was seen in bus use in England between 2003/2004 and 2007/2008.

In 2006/2007, government financial support for local bus services (including public transport support, concessionary fare reimbursements and the bus service operators grant, but excluding passenger receipts) increased by 15.5%. Since April 2006, over-60 year-olds and disabled people have been able to travel free on local bus services within their own local authority areas, and from April 2008, the same concession applied throughout the country. In 2006/2007, passenger receipts on local bus services increased by 4.5%, while total income for local bus services, including government support, increased by 8.9%.

The bus market in the UK continues to be dominated by five major operators, which together account for almost three-quarters of all buses on UK roads. In addition to their UK growth activities, these leading operators are also expanding their operations overseas. For example, FirstGroup PLC has established itself as a market leader in the North American bus-transport market following its acquisition of the US bus operator Laidlaw International in 2007. Similarly, Arriva PLC is expanding its business in continental Europe through a series of acquisitions.

According to the Confederation of Passenger Transport UK, fuel costs for bus and coach operating companies increased by an average of 9.6% in the year ending June 2008. Although fuel is a significant cost pressure, it still only accounts for an average of 13% of the overall costs of bus and coach operators, and an even smaller percentage for some of the larger companies that are able to hedge their fuel contracts. Smaller operators are more at risk, as they typically have a fuel spend below the threshold volumes at which fuel hedging contracts are available, and, as a result, face fuel cost increases that are well in excess of the national average.

Key Note forecasts that the value of the total bus and coach services market will continue to increase in the 5 years to 2012/2013. The factors that are expected to aid this increase include: additional travel under concessionary fares schemes; partnerships with local authorities; and consumers choosing to switch to public transport as a result of rising motoring costs and concerns about the environment. However, there are also some significant uncertainties for the future of the market regarding demand management policies in urban areas, and the strategies adopted by local authorities and bus and coach operators more generally.  
 

Executive Summary

1. Market Definition

REPORT COVERAGE

MARKET SECTORS

MARKET TRENDS

Bus Journeys Continue to Increase

Bus Fares Rise

Bus Design

London Continues to Dominate Bus Market

Leading UK Bus and Coach Operators Expand Overseas

ECONOMIC TRENDS

Population

Table 1: UK Resident Population Estimates by Sex

(000), Mid-Years 2003-2007

Gross Domestic Product

Table 2: UK Gross Domestic Product at Current

and Annual Chain-Linked Prices (£m), 2003-2007

Inflation

Table 3: UK Rate of Inflation (%), 2003-2007

Unemployment

Table 4: Actual Number of Unemployed Persons

in the UK (million), 2003-2007

Household Disposable Income

Table 5: Household Disposable Income Per Capita (£),

2003-2007

MARKET POSITION

The UK

Table 6: Passenger Journeys on Public Transport

in Great Britain by Mode of Transport

(million journeys and %),

Years Ending March 2004-2008

Table 7: Distance Travelled on Public Transport in Great Britain by Mode of Transport (billion

passenger kilometres and %), 2002-2006

Overseas

Table 8: Number of Buses and Coaches in Use

in the EU-25 (000 and %), 2000, 2003 and 2004

2. Market Size

THE TOTAL MARKET

Table 9: The Total Bus and Coach Services Market

in Great Britain by Value at Current Prices

(£m and %), Years Ending March 2004-2008

Figure 1: The Total Bus and Coach Services Market

in Great Britain by Value at Current Prices

(£m), Years Ending March 2004-2008

Local Services

Government Support

Table 10: Local Bus Services — Government Support

at Current Prices (£m), Years Ending March 2003-2007

Table 11: Local Bus Services — Breakdown of Operators’ Income (%), Years Ending March 2003-

2007

Operating Costs by Area

Table 12: Local Bus Services in Great Britain — Operating Costs by Area at Constant 2007/

Prices (pence per vehicle kilometre and pence per passenger journey),

Years Ending March 2003-2007

Fare Indices by Area

Table 13: Local Bus Services in Great Britain — Fare Indices

by Area at Constant Prices (index 1995=100),

Years Ending March 2004-2008

Number of Passenger Journeys by Area

Table 14: Local Bus Services in Great Britain — Number

of Passengers Journeys by Area (million and %),

Years Ending March 2004-2008

Table 15: Local Bus Services in Great Britain —

Vehicle Kilometres by Area (million),

Years Ending March 2004-2008

Vehicle Kilometres — Commercial and Subsidised Services

Table 16: Vehicle Kilometres — Commercial and Subsidised Services in Great Britain Outside

London (million vehicle kilometres and %), Years Ending March 2004-2008

Non-Local Services

By Volume

Table 17: Non-Local Bus Services in Great Britain —

Bus Passenger Kilometres (million and %),

Years Ending March 2004-2008

Table 18: Non-Local Bus Services in Great Britain — Vehicle Kilometres (million and %), Years

Ending March 2004-2008

3. Industry Background

RECENT HISTORY

NUMBER OF COMPANIES

Table 19: Number of Active Bus and Coach Operators in

Great Britain (number and %), Years Ending March 2004-2008

Table 19: Number of Active Bus and Coach Operators

in Great Britain by Number of Discs (number and %),

Years Ending March 2005-2008

Table 21: Number of Public Service Vehicles

in Operation in Great Britain by Type of Vehicle,

Years Ending March 2004-2008

EMPLOYMENT

Number of Employees by Type of Job

Table 22: Number of Bus and Coach Staff in Great Britain

by Type of Job (000), Years Ending March 2004-2008

REGIONAL VARIATIONS IN THE MARKETPLACE

Table 23: Bus Passenger Journeys by Government Office Region in Great Britain (million), Year

Ending March 2008

DISTRIBUTION

Table 24: Type of Bus Ticket Used by Area in Great Britain

(% of total), Year Ending March 2008

HOW ROBUST IS THE MARKET?

Table 25: Overall Change in Bus and Coach Annual

Operating Costs (%), Years Ending June 2004-2008

Table 26: Annual Change in Bus and Coach Operating Costs

by Individual Cost Category (%), Year Ending June 2008

Table 27: Breakdown of Bus and Coach Operating Costs

by Individual Cost Category (%), Year Ending June 2008

LEGISLATION

Concessionary Bus Travel Act 2007

Disability Discrimination Acts 1995 and 2005

Table 28: Full-Size Buses with Low-Floor Wheelchair Accessibility in Great Britain (%), 2003/

2004-2007/2008

KEY TRADE ASSOCIATIONS

Coach Tourism Council

Confederation of Passenger Transport UK

4. Competitor Analysis

THE MARKETPLACE

Table 29: Leading UK Bus Operators by Approximate

Size of Fleet (number and %), September 2008

MARKET LEADERS

FirstGroup PLC

Company Structure

Current and Future Developments

Financial Results

National Express Group PLC

Company Structure

Current and Future Developments

Financial Results

The Go-Ahead Group PLC

Current and Future Developments

Financial Results

Arriva PLC

Company Structure

Current and Future Developments

Financial Results

Stagecoach Group PLC

Company Structure

Current and Future Developments

Financial Results

OUTSIDE SUPPLIERS

Table 30: New Registrations of Buses and Coaches in the UK

by Manufacturer (number and %), 2006 and 2007

MARKETING ACTIVITY

Table 31: Main Media Advertising Expenditure by Bus

and Coach Operators (£000), Years Ending June 2004-2008

Table 32: Main Media Advertising Expenditure by Bus

and Coach Operators (£000), Year Ending June 2008

EXHIBITIONS

Coach & Bus Live 2009

European Bus & Coach Exhibition

UK Bus Awards

5. Strengths, Weaknesses, Opportunities and Threats

STRENGTHS

WEAKNESSES

OPPORTUNITIES

THREATS

6. Buying Behaviour

BUS PASSENGER SATISFACTION SURVEY

Overall Satisfaction Indicators

Table 33: Overall Satisfaction Ratings Among

Bus Users in England by Area, 2003/2004-2007/2008

Table 34: Overall Reliability† Ratings Among

Bus Users in England by Area, 2003/2004-2007/2008

Key Satisfaction Indicators

Table 35: Satisfaction Ratings Among Bus Users

in England by Category, 2003/2004-2007/2008

Table 36: Satisfaction Ratings Among Bus Users

in England by Category by Area, 2007/2008

Table 37: Satisfaction Ratings Among Bus Users in England

by Selected Category by Region Excluding London, 2007/2008

Table 38: Overall Service Satisfaction Ratings Among

Bus Users in England by Sex and Age by Area, 2007/2008

Table 39: Overall Service Satisfaction Ratings

Among Bus Users in England by Purpose of Journey

by Area, 2007/2008

Table 40: Overall Service Satisfaction Ratings Among

Bus Users in England by Frequency of Use by Area, 2007/2008

7. Current Issues

POLITICS

£25m Additional Funding for the KickStart Programme

Review Backs Yellow School Buses

Quality Partnerships

INDUSTRIAL ACTION

Unite Members Strike for Improved Pay

CONSUMER BEHAVIOUR

Rise in Public Transport Use Expected as Concerns Grow Over Costs of Motoring

CORPORATE ACTIVITY

LEGISLATION

The Local Transport Bill

The Concessionary Bus Travel Act

TECHNOLOGY

8. The Global Market

COMPARATIVE TRANSPORT PERFORMANCES

Table 41: Passenger Transport Performance of the EU-25,

the US and Japan by Mode of Transport

(billion passenger kilometres and %), 2004

Table 42: Passenger Transport Performance of the EU-25,

the US and Japan by Mode of Transport

(000 passenger kilometres per inhabitant), 2004

Europe

Table 43: Passenger Transport Performance

in the EU-25 by Mode of Transport

(billion passenger kilometres and %), 2000-2004

Table 44: Comparison of Bus and Coach Numbers

and Use in the EU-25 (000, billion passenger kilometres

and 000 passenger kilometres per vehicle), 2004

The US

Table 45: US National Bus Fleet by Size of Fleet, Average Fleet Age and Number of Funded Bus

Operators, 2003-2007

Table 46: US National Bus Fleet Revenues by Source

of Revenue ($m at constant 2000 prices), 2003-2007

Table 47: US National Bus Fleet by Passenger Trips and Vehicle Revenue Miles (millions), 2003-

2007

Leading Operators

9. Forecasts

INTRODUCTION

The Economy

Gross Domestic Product

Table 48: Forecast UK Growth in Gross Domestic Product

in Real Terms (%), 2008-2012

Population

Table 49: Forecast UK Resident Population

by Sex (000), Mid-Years 2008-2012

Inflation

Table 50: Forecast UK Rate of Inflation (%), 2008-2012

Unemployment

Table 51: Forecast Actual Number of Unemployed Persons (millions), 2008-2012

Key Trends in the First Half of 2008

FORECASTS 2008 TO 2013

Table 52: The Forecast Total Bus and Coach Services Market

in Great Britain by Value at Current Prices (£m),

Years Ending March 2009-2013

Figure 2: The Forecast Total Bus and Coach Services Market

in Great Britain by Value at Current Prices (£m),

Years Ending March 2009-2013

Table 53: Local Bus Services in Great Britain —

Forecast Number of Passenger Journeys by Area

(million and %), Years Ending March 2009-2013

MARKET GROWTH

Figure 3: The Forecast Total Bus and Coach Services

Market in Great Britain by Value at Current Prices

(£m), Years Ending March 2004-2013

FUTURE TRENDS

Targets for Public Transport

10. Company Profiles

Arriva Plc

Firstgroup Plc

The Go-ahead Group Plc

National Express Group Plc

Stagecoach Group Plc

11. Further Sources

Associations

Publications

General Sources

Government Publications

Other Sources

Bisnode Sources

Key Note Research

The Key Note Range of Reports