Future of the ‘Big Three’

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Adrian

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06 Jan 2022, 2:07 pm

#8

(06 Jan 2022, 7:48 am)54APhotography Megabus is now majority owned ComfortDelGro, with SocttishCityLink and some other coach operations. National Express coaches shouldn't change in terms of outsourcing, but the fine detail is to come.

Arriva have been on the market for three years, DB want rid of all of it, Bus, Trains the whole shooting match. The big problem is valuation. While it may look like an attractive proposition to Transdev in enthusiast eyes, it isn't. The fleet is ageing and needs massive investment, very possibly more in £s than the actual worth of the shares. Running a company down to the bone is never a good way of selling, despite that being ever so often the case.

First have given up hopes of selling the British bus operation, they made a huge loss in America, they are probably not in a strong enough financial situation to make a bid for a company as big as Go Ahead, and what value to Go Ahead is a merger? Outside of London their operations have been hugely impacted by Covid and pressure over various ULEZ'.

I'm interested to see how the ComfortDelGro deal works out. The press release was that CDG would be take over ownership, marketing, retail and customer service activities of Megabus (and Falcon), but we know that the vehicles themselves are owned and maintained by the various Stagecoach subsidiaries, operated for Megabus likely through some kind of transfer pricing arrangement. I can't see that changing in the first few years, as CDG still need those buses on the road and running to have a business, but it creates quite an odd situation.

You'd have the second largest coach operator outsourcing work to the largest coach operator, who then outsource their own coaching work to other operators. It also gives them a massive ability to influence the cost of coach travel.

In my opinion, there'll have to be changes somewhere down the line, likely with CDG moving to moving to a similar position as NX and using multiple contractors to deliver Megabus services, but it remains to be seen.

Couldn't agree more re: your Arriva comments. No one in their right mind would purchase the Arriva UK bus operation as a whole, unless the sole purpose was to asset strip it. The more likely result is individual depots or areas being sold, where it makes operational sense for another operator to purchase that work.

Go North West in Manchester is a good example and perhaps also good foresight, as it's given Go Ahead a base to operate out of and win work under the incoming regulated network there.

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