(20 May 2023, 5:49 pm)Unber43 wrote How on earth have they lost 4 million

For the same reasons all bus operators have seen a huge loss of revenue: poor patronage recovery following the pandemic.

Profits were hardly strong at GNE pre-Covid, and have been in constant decline since 2015.

The issues with Go North East’s finances have likely been exacerbated by fares which are, in the main, too cheap. The previous Managing Director took a huge gamble by reducing and simplifying fares. Unfortunately this did not result in the growth required for the scheme to wash its face.

One could argue this was due to the early recovery of services following the pandemic, or due to the poor operational performance (now, in the main, a thing of the past)… Who knows.

The large loss of revenue paired with ever-increasing costs (including a real terms pay increase of 15-20% in July 2022 to help attract and retain driving staff) is a recipe for disaster.

The new executive team in place at Go North East seem far more cost-focused - this is evident through a distinct lack of repaints/refurbishments, spend on discretionary items, the early termination of some loss-making contracts, and a well-publicised restructure of clerical staff and management.

The company is very clearly now in a turnaround. I suspect it will be a long time before any “gambles” to improve revenue will be taken - new fare initiatives, network changes, or otherwise.

The fact operators will only receive around 50% of the Government support they currently receive from 1 July, paired with alleged reductions in ENCTS payments from local authorities (as has been suggested is the reason for impending cuts at Arriva) won’t do any good at all for the profits of any operators in the region.


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