Bus Industry Monitor 2006 Published
BUS INDUSTRY PROFITS COLLAPSE TO TEN YEAR LOW, SAYS NEW REPORT
Pre-tax profit margins in the UK bus industry have fallen to their lowest level since the recession of 1993/94, according to a new report from transport consultants TAS, published today.
The report, which has analysed the results of more than 130 bus companies around the country for 2004/05, finds that margins fell to 7.2%, compared with 9% in the previous year. The largest fall was in the English PTE areas, which saw profit levels fall from 12.3% to 9.9%. The lowest margins achieved are in the English Shire counties, at 5.1% (2003/04: 7.1%).
The new 628-page Bus Industry Monitor is the 16th edition of the major report on the Britain’s bus services, first published in 1991 and widely quoted by City analysts, academics, government and the media.
Commenting on the findings, the report’s editor Chris Cheek said, “The continuing rises in labour costs, pensions and fuel began to take their toll in 2004/05, and this clearly shows up in the analysis.”
The report shows that operating costs rose by 9.9% during the year – roughly three times the rate of inflation. One of the main causes was an increase in unit labour costs, which rose by an average of 8.5%. At the same time as these costs are rising, new analysis undertaken by TAS shows that increasing congestion is taking its toll. “DfT statistics show that the number of kilometres run per staff member has fallen by over 16% since 1997,” Cheek reported. “Government and local authorities have failed to deliver on reducing congestion and providing priorities for buses.”
The fall in profits and in staff productivity comes at a time when Government spending on bus services is rising fast. The report shows that this has increased by 51% in real terms over the last five years: planned spending in 2005/06 topped £2bn for the first time. “It is fascinating to note that, in real terms, the public spending total is now approaching the levels last seen prior to deregulation 20 years ago,” Cheek commented, “and that is before the cost of extending free concessionary fares to the whole of England earlier this year.”
ENDS
For further information, contact Chris Cheek on 0870 900 1440
NOTES TO EDITORS
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TAS Publications & Events is the publishing arm of The TAS Partnership. Founded in 1989, TAS has since grown to become the UK’s leading specialist public transport consultancy. Its recent clients include the Department for Transport, the Scottish Executive and the Welsh Assembly Government, as well as local authorities and transport operators throughout the country.