Buses won’t be full for years, says Stagecoach
. . . as revenues and earnings crash
STAGeCOACH has warned it could take several years for passengers to start riding on buses at pre-pandemic levels.
Government advice changed last week, saying people may now use public transport after months of being encouraged to stay at home, commute by bike or to walk.
But the company cautioned that there could be some permanent changes to the way people travel and that it could take a long time to regain lost ground. This echoes similar forecasts from airlines, which don’t expect to recover until 2023 at the earliest.
Stagecoach reckons a rise in home working, online shopping and more medical appointments being conducted over the phone could dent demand, as fewer people will need to travel.
The prediction came alongside its results for the year to May 2.
Revenue, which had been on track before the pandemic hit, dropped from £1.9bn the year before to £1.4bn. Profits slumped by £101m to £41m.
Chief executive Martin Griffiths said: ‘every single day we’re seeing more and more people coming back to public transport.’
However, the company expects to rely on Government funding to prop it up for the rest of 2020.
Along with other bus operators, it has received state cash since March to keep running services for key workers, even though at the height of lockdown the number of passengers plunged by 90pc. That support is due to run out in mid-October, but Stagecoach said talks have already begun to extend this by 12 weeks.
Finance boss Ross Paterson said: ‘There’s a recognition from Government that if they want certain levels of service to operate, then the costs need to be covered.’ Stagecoach is running about 80pc of its services and passenger figures are at 40pc of 2019’s levels.
Griffiths said they were ‘a creditable set of financial results in what has been one of the most challenging and sobering periods for citizens, communities and economies across the globe in memory’.
As well as the effects of Covid-19, it was also hit by selling its North American unit and by the end of two rail contracts. The company declined to offer any forecasts about its full-year performance to next May as the pandemic means trading is still in flux.
It has around £800m in cash available and is looking for ways to cut costs.