The top passenger transport 12 leaders – 6 in the UK and 6 from Europe

Four chief executives of UK-based transport businesses, and two other British big-hitters, feature in New Transit’s 2012 list of the UK and Europe’s top dozen wielders of power in passenger transport. All are judged to have the necessary significant influence on both their own organisations, and in the sector more generally.

Sir Brian Souter, the Stagecoach chief executive who topped our Power 50 last year, is still widely regarded as the leading passenger transport businessman in the UK, after creating an enduring business model which has delivered industry leading margins while focusing on revenue growth rather than cost cutting. He continues to surprise with new innovations and deals, both at Stagecoach and through his private Souter investments business. Together his PLC and private ventures are creating real impact in Europe and the USA in the field of intercity travel, and further afield in the world of ferries and other modes. His achievements in innovation and business performance are acknowledged by his peers as the standards the rest of the industry needs to match.

For First’s new chief executive Tim O’Toole, it has been a rather more problematic year than Souter’s, based on coming to terms with what is looking like an increasingly difficult inheritance from his predecessor Sir Moir Lockhead. It is fair to say that during the past 12 months, a number of emerging difficulties started to present themselves as live issues rather than just being  ‘on the radar’, and the City began to question First’s financial strength. O’Toole has not only responded himself, but signed up new senior colleagues to reshape the First empire, notably the forward thinking Giles Fearnley in the UK bus division. The forthcoming changes to Veolia Transdev may mean First regains its position as the world’s largest private sector transport group, in terms of revenue if not geographical footprint. Perhaps the key challenge is turning round the performance of the huge US school bus business, while attempting to capitalise on First’s position as the largest operator in the expanding US coach market.

Dean Finch has had a challenging year too at the helm of National Express. His inheritance from Richard Bowker was  shambolic with the group put on the run from its UK rail activities after the fiasco of East Coast, and with profitability at the once industry-leading West Midlands bus company having plummeted. Now Finch has the opportunity to grow considerably in influence after spending the past two years repairing the damage of Bowker’s tenure. During this time, he has had his eye on keeping National Express in the wider game. Potentially, NEG is in a position to become one of the leading players in the inter-urban coach market that is being opened up across Europe. Arguably, NEG’s Spanish coaching business provides a platform to compete in mainland Europe that no other business enjoys. Expansion strategies will no doubt draw on the entrepreneurial ability of Jorge Cosmen, who has been a non-executive director of NEG since his family sold their ALSA coaching business to the group. In the US, National Express remains the second largest player in the school bus sector, and in 2011 established a presence in the US paratransit market.

David Martin is in an altogether different position in terms of his responsibilities and role, but has a position of considerable power. As chief executive of Deutsche Bahn-owned Arriva, which the German state giant acquired in 2010, he may well have more ability to influence the consolidation of UK and European passenger transport markets than any other person. DB appears to have made good on its stated intention of allowing Martin independence to run Arriva’s operations in 12 countries, and during the year began referring to Arriva as its “entrepreneurial arm”.  DB’s financial strength alongside Martin’s proven business building and deal-making record appears a uniquely powerful combination.

Political influence over transport is meanwhile arguably higher than at any time since the era of privatisation. Significant new finance is being allocated to both urban and inter-urban transport systems including high speed lines, whilst there is pressure on cost levels and subsidies from political masters. Integrated multi-modal thinking is also to the fore amongst both national, regional and urban political leaders. In fact, it is the leader of arguably Europe’s most significant transport metropolis, not the country’s senior transport minister, who makes our top 12: London Mayor Boris Johnson.

The reason for Johnson’s inclusion is threefold: his day to day influence on the way transport is provided on the ground, his ability to innovate, and London’s standing as a city that now bears comparison with almost any other for the quality of its transport and its ease of use. In 2011, Johnson unveiled both his new ‘Borismaster’ bus designed for London and plans for world-leading contactless bankcard EMV ticketing across the capital. As the next generation system-wide payment concept, EMV it  is likely to be widely emulated.  The ground has also been laid by Johnson’s transport commissioner Peter Hendy and his team for an entirely new approach to demand management and customer information provision during this summer’s Olympic Games. It is expected to leave a legacy at least as important as the £6.5bn upgrade programme to the railways which will serve the Games sites.

Another agency chief in the UK also makes our top 12 in the shape of Sir David Higgins, the new chief executive of Network Rail. The impacts of the McNulty reforms are expected to be far reaching in testing a range of different models for infrastructure operation from full vertical integration to regional alliances between infrastructure operator and train operator.  New ways of working with engineering contractors in partnership arrangements, rather than traditional contractor-client relationships, are already being tested. Network Rail, under Higgins, is the key agency that will drive these changes and act effectively as a laboratory for assessing different contractual models, which in the future may have an impact in Europe and beyond. Experience gained during its current reorganisation will surely play a major part in plans Network Rail is developing to sell consultancy services overseas.

The Big 6 from Europe

Alongside the top six UK leaders, six Europeans can claim an equal significance in and beyond their own territories and organisations.
For the EU as a whole the influence of the Commission has gained further importance over the past year putting EC transport commissioner Siim Kallas as an obvious inclusion in our top 12. The EU’s interests extend across competition policy and the structure of the railways, investment in new infrastructure, charging and pricing regimes and consumer rights. Its influence also extends to matters such as the way contracts are awarded.

As the influence of the European commission and large European transport groups grows, so too will the position of UITP, the Brussels-based International Association of Public Transport, now headed by new secretary general Alain Flausch. He was previously head of one of Europe’s most forward-thinking transport organisations, Brussels operator STIB. UITP’s stated aim is for public transport to double its market share by 2025 based on the creation of a new customer focused business model. It has considerable influence in the European Commission and among Europe’s transport authorities and operators who are its predominant funders. Many of their senior executives hold prominent positions on UITP executive and policy boards.

Among the leaders of the major state-owned European businesses there are four key individuals who make it onto New Transit’s new top 12. All will be key players in determining how services in the UK and Europe develop and how consolidation in European transport markets unfolds.

Rudiger Gruber and Guillaume Pepy’s inclusion is mandatory as the heads of DB and SNCF respectively, the two largest public transport organisations in Europe. DB is now the owner of Arriva and SNCF’s Keolis international transport subsidiary matches the size of Arriva in Europe with comparable turnover and geographical footprint. As yet, SNCF/ Keolis operates in the UK only as an investor with a significant minority stake in four rail franchises. Its forthcoming attempt to win  West Coast will be its first foray as an independent bidder.

Meanwhile, Paris-based operator RATP, headed by Pierre Mongin, has signalled its intention to compete with larger European rivals. It is now a significant international business with subsidiaries in five European  countries and 12 worldwide. The merger of Transdev, in which it had a 25% stake, and Veolia saw RATP gain its first wholly-owned operations in the UK, including a significant bus operation in London, subsequently supplemented by  Manchester Metrolink.
For Veolia Transdev itself, the future is now in the melting pot, though its significance is undeniable. As Veolia moves to dispose of its interest in the global transport conglomerate, Veolia Transdev chief executive Jerome Gallot, whose roots are in the Transdev side, will be the key influence in determining how much of the company remains in Transdev hands and what may be sold to competitors.