Stagecoach to Cut Costs as Bus Revenues Collapse
Stagecoach said its regional bus revenues had dropped by 85% as it revealed plans to furlough more than half its bus drivers and engineers.
In an update to the stock market yesterday, the Perth-based transport giant said it was difficult to reliably estimate the short-term impact from coronavirus on sales.
“Commercial sales at our local regional bus operating companies are now at around 15% of normal levels,” the firm said.
“Vehicle mileage at those companies is now at around 50% of normal levels with plans to reduce that closer to 40% over the next week.
“Our regional bus business has already furloughed a significant proportion of its staff as part of plans to furlough around 55% of its bus drivers and engineering staff. Other employees have also been furloughed.
“Fuel hedging has been reduced to take account of the reduction in regional bus mileage.”
Furloughed staff will be paid the lower of 80% of their pay or £2,500 per month.
The company said government measures unveiled this week would support the continuity of bus services.
The Scottish Government confirmed it will maintain payments of concessionary revenue and the Bus Services Operators Grant to bus and coach operators at the levels forecasted prior to the impact of Covid-19.
Meanwhile the Convention of Scottish Local Authorities (COSLA) has issued guidance to local authorities to ensure they continue to pay for school transport.
Stagecoach has reducing its regular services and it will temporarily wind down its Megabus service in England and Wales this weekend.
However the firm has also laid on extra buses to hospitals and key food and manufacturing sites. Stagecoach chief executive Martin Griffiths said: “We are continuing to work hard to ensure Stagecoach comes through this difficult period well placed for the significant long-term opportunities that we still see for public transport.
“We would like to thank the respective governments and our local authority partners for their support through this very challenging period.
“It is welcome recognition of the importance of maintaining bus services at this time, and it will enable key workers to continue to travel to and from work, as well as ensuring communities can still access food, medical care and other essential services.”
The firm said it had £506 million of available cash and bank facilities.
It plans to reduce its planned capital spend for 2020/21 from £105m to around £40m.
Outlay on new leases will almost half from a planned £38m to £20m.
