Stagecoach sets out strategy to cope with bus use collapse

Buses

Stagecoach has furloughed more than half its drivers and engineering staff outside London to reduce costs during the Covid-19 lockdown. 

About 55 per cent of drivers and engineering staff in its regional bus business have been placed on the Government’s Coronavirus job retention scheme that sees the state cover 80 per cent of employees’ usual monthly wage costs. Other bus operators are thought to have furloughed similar proportions of their staff but have not gone public with the figures. 

Operators have slashed services in response to an unprecedented collapse in demand, with the Government ordering people to stay at home unless absolutely necessary.

Stagecoach revenues on regional bus were about 15 per cent of normal in early April.  The operator initially cut vehicle  mileage to about 50 per cent of normal and expected this to drop to about 40 per cent in week commencing 7 April. The megabus.com intercity coach network was suspended in England and Wales on 5 April but continues to run in Scotland.  

Revenues at South Yorkshire Supertram are around ten per cent of normal levels and vehicle mileage is around 30 per cent.   Stagecoach has discussed with local authorities the possibility of ceasing operations altogether. 

Stagecoach has also revealed the impact of Covid-19 on its investment plans. The operator had planned to make cash capital expenditure of circa £105m and enter circa £38m of new leases in 2020/21. The new plan will see these cut to circa £40m of cash capital expenditure and circa £20m of new leases.

The operator said: “The scaled-down plans reflect vehicles ordered that are either already built or largely built, vehicles required for new London bus contracts secured, electrical infrastructure work required for new London bus contracts secured, the completion of some ongoing land and buildings work, and a reduced spend on technology and change projects.”

Stagecoach said it had about £506m of available cash and undrawn, committed bank facilities, though £94m of this is for outstanding net rail liabilities.

Covid-19 caused a big drop in public transport operators’ share prices. Stagecoach shares were  worth 75.5p on Thursday (16 April), up from a low of 57.5p on 18 March but still far below the 164p at the beginning of the year.  

The company has explained the actions it is taking to help key workers get to/from work. In London, it is working with TfL to run dedicated shuttles for NHS staff working at the new 4,000-bed Nightingale emergency hospital in Docklands (as of this week, the facility had seen only a handful of patients).

Dedicated bus services for NHS staff are operating at the  Hull Royal Infirmary; Kings Mill Hospital in Mansfield; and the Diana, Princess of Wales Hospital in Grimsby.

NHS workers can receive discounted tickets in and around Aberdeen. Free travel on a dial-a-bus service is available for NHS staff in the Inverness area going to or from Raigmore Hospital and New Craigs between 7-10pm.

In Glasgow, Stagecoach and McGill’s are offering inter-operable ticketing on their routes between Glasgow and the Queen Elizabeth University Hospital.

Stagecoach is offering free travel to NHS workers in South Wales as part of the Welsh Government’s bus support package.

Free travel is available for NHS workers at the Royal Devon Hospital. Discounted fares are available for NHS staff at Southmead Hospital in North Bristol and NHS staff in Gloucestershire.

Stagecoach has extended the 14/14A route in Oxford to a temporary parking facility for staff at the John Radcliffe Hospital.

In Teesside, the Tees Flex demand responsive buses are being kept on standby to help with patient transport services.