Supplementary Memorandum by National Express
Group Plc (IT 158B)
BUS AND COACH OPERATIONS
1. GROWTH IN
NEG's assessment of future passenger demand
is based on the aggregation of data from external sources, such
as population, GDP and forecast traffic growth and experience
from the implementation of service improvement schemes.
However any attempt to understand the future
dynamics of transport demand must be based on a clear understanding
of the factors that affect overall transport demand and, specifically,
Two factors are crucial:
The economic architecture
of the operating industryincentives, availability of capital,
The relationship of public transport
to the other modesspecifically the role of price signals
and the effects of traffic congestion.
The economic architecture
For many years the transport industry suffered
from a failure to focus on passengers and their needs. Privatisation,
and the subsequent flotation of many transport groups, mean that
operators are, for the first time in many years, financially incentivised
to retain and grow passenger numbers. This was not necessarily
the case under previous forms of ownership where companies either
had access to operating subsidies or could operate on a break-even
basis. In contrast, private investors and city institutions seek
capital growth that is ultimately driven by growth in profits
and passenger volumes.
Competitive capital and operating markets sharpen
these incentives: operators that do not provide high-quality services
not only face the threat of competition but also possible take-over.
There can therefore be no doubt that the necessary financial incentives
for growth are now in place.
The effects of rising car ownership
Rising car ownership, and its effects, are the
major issues facing bus and coach operations. The dynamics of
this process affect the bus and rail sectors in somewhat different
Car owners make fewer public transport trips.
This, in itself, weakens the economics of bus and coach operation.
Many parts of the population that are currently heavy bus usersfor
example the elderlywill in future have greater access to
cars and driving licences as car ownership spreads in income and
geographical terms. Moreover the taxation of motoring in the UK
effectively penalises car ownership rather than car use.
Once an individual has made the decision to purchase a car it
is entirely rational for them to maximise the use they make of
an expensive asset.
Secondly, the growth in traffic levels experienced
since the war has had huge, negative effects on bus operations:
Bus journeys have become slower.
Bus operating costs have been inflated
by these time delays.
Fare levels have had to be increased
to meet rising costs.
Services have become unreliable.
Road improvements have increased
the speed advantage of cars in relation to buses.
Therefore worsening traffic congestion by itself,
encourages further car use at the expense of bus travel. Conversely
where congestion worsens beyond a certain point (particularly
on radial and interurban routes), rail may actually benefit
by virtue of its dedicated track and potential for speed and reliability
advantage against the car.
Therefore the first priority of any policy
to encourage bus use must be to improve the speed and reliability
of bus services through appropriate traffic management measures.
Urban dispersal and land use planning
Sustained growth in car ownership over many
years has also had other effects. Housing, shops, leisure and
employment opportunities have dispersed from city centres into
low-density developments that are very hard to serve efficiently
by public transport. This has further encouraged car use.
Any policy to encourage the use of public
transport must discourage further urban dispersal and concentrate
new developments at locations that can be effectively served by
existing or potential public transport systems.
The availability and cost of parking spaces
is a major determinant of mode choice. Commuters who have "free"
parking spaces at work are more likely to travel by car.
Shoppers may switch their allegiance from city
centres to out-of-town locations with plentiful free parking.
The availability and price of car parking
spaces heavily affect the demand for bus and coach services.
Three conclusions can be drawn from this
The fundamental factors influencing
transport demand are outside the control of the operators.
These factors are related to the
overall transport market, not the regulatory regime for the public
The "do-nothing" scenario
will result in a continuation of the underlying decline in ridership.
Recent changes to this decline are primarily the effect of marketing
and investment initiatives.
All of these factorsrising car ownership,
rising congestion, urban dispersal and parking policyare
deeply rooted in our post-war economy. The decline in ridership
dates from at least 1951, although the trend has slowed significantly
in recent years.
The areas which have broken out of this spiral
of declineOxford, Edinburgh, West Midlands, for exampleare
characterised by innovative transport operators working in partnership
with local authorities committed to addressing the fundamentals
of traffic management, land use planning and parking policy.
National Express Ltd carries around 12 million
coach passengers each year on its National Express, Express Shuttle
and Flightlink services. Passenger volumes roughly doubled in
the early 1980s and have continued to grow since 1994.
The fastest growth has been achieved on the
Express Shuttle and Flightlink services. Express Shuttle coaches
provide high frequency services over fairly short routes, eg.,
Liverpool-Manchester-Leeds, London-Cambridge. Flightlink services
provide links to airports, primarily Heathrow and Gatwick. The
traditional long distance coach services have suffered some decline
over the last two years, especially in the more rural areas.
Although the operators cannot deal with these
economic fundamentals on their own, they can take action to improve
ridership. NEG's policies reflect work carried out by Transport
2000 on removing the carriers to public transport use. Our priorities
1. Improve the frequency of service to
offer a more "car-like" operation, i.e., "turn
up and go".
Day time frequencies on all major TWM corridors
are already high. Equally services operate up to midnight, with
a night service on Fridays and Saturdays. A recent initiative
has seen day time frequencies extended into the evening.
2. Offer a range of value-for-money fares.
TWM offers an extensive range of single, day
and season tickets and participates in all multi-operator and
multi-mode tickets available for use in the West Midlands. For
example it is possible to buy a day ticket on a TWM bus which
is valid for travel on any other bus operator or any rail operator's
services throughout the West Midlands.
3. Improve the comfort and physical accessibility
of our vehicles, through a programme of continuous fleet investment.
All new buses, including minibuses, are now low floor, wheel chair
4. Continuously improve levels of customer
information about services and fares. Distinctive route branding
and simplified "tube" style maps are being introduced
to make the network more understandable to the occasional user.
5. Improve customer care through careful
selection and training of staff and by deployment of more staff
in "front-line", customer-interface, and roles.
6. Improve integration with other operators
and modes (including directly competitive ones) through collaborative
7. Improve the speed and reliability of services
through Quality Partnerships with local authorities. The initial
"Showcase" routes have shown what can be achieved, but
many more bus priority measures are required.
Quality Partnerships vs Quality Contracts
Quality Partnerships between operators and local
authorities are essentially designed to link two complementary
Improvements to bus services that
can be undertaken by operatorsfrequency enhancements, new
vehicles, better information, etc;
Traffic management to improve
the speed and reliability of bus services.
They therefore provide a coherent means of improving
the overall service offer to passengers with the objective of
increasing ridership. Practical experience of Quality Partnerships
has shown their effectiveness in improving ridership levels quite
substantially over short timescales.
Quality Contracts, in their accepted sense, simply
shift responsibility for service planning from operators to local
authorities and then contract-out the operation of services through
some sort of tendering exercise. They therefore blunt the current
financial incentives to meet passenger needs and fail to address
the fundamental traffic management issues that explain declines
Experience from Quality Improvements
Through the co-ordination of these programmes
and improvements TWM has been able to stem the historic decline
in bus patronage and achieve organic growth.
Overall growth of up to 2 per cent per annum
appears to be practical through operator initiatives alone. Much
more can be achieved when these initiatives are combined with
effect bus priorities. TWM believes that growth rates of 5-10
per cent per annum are possible in the medium term if there appropriate
changes in traffic management and car parking pricing policy.
TWM is spending between £20-£30 million
a year on capital expenditure, principally new vehicles, but also
on new depots. The ultimate aim is to stimulate demand through
significant improvements in the quality of service offered.
These service improvements will include increases
in frequency, better information and customer care, backed up
by an enhanced advertising campaign designed to show the potential
passenger how buses have changed since they last used them. TWM
constantly assess ridership and has the physical resources necessary
to increase frequencies, introduce new services within a three
Coach patronage levels are constantly monitored
on a day by day basis and NEL has the almost unique ability to
increase services very quickly to meet demand. For example extra
journeys can be added at peak times such as Christmas. Equally
permanent increases in frequencies/services can be achieved within
a few weeks.
Traffic Management and Bus Priorities
The fundamental barrier to increased demand
for bus and coach services is the progressive worsening of traffic
congestion. Although considerable progress had been made with
up-grading vehicle fleets, improving the overall and marketing
of bus services, the extension of bus priority schemes simply
hasn't kept up with the rising tide of traffic congestion.
There appears to be a lack of political will
at the local level to implement traffic management schemes that
will positively discriminate in favour of buses and coaches. In
fact for coaches one of the obstacles to improving services is
often the legal prohibitions which prevent coaches making full
use of bus lanes and other pro-public transport traffic management
This lack of political will has been compounded
by the lack of funding for relatively cheap measures, which produce
returns within one or two years. Too much money has been allocated
to small number of big schemes, e.g., LRT and major road schemes.
Increasing pedestrianisation, whilst of merit
in itself, is having the effect of severely restricting kerb spaces
for buses and waiting passengers in cities and town centres. Too
often passengers are being forced to wait in hostile, exposed
and poorly lit areas on inner ring or circulatory roads and buses
are unable to reach the kerb due to lack of space, thus negating
any easy access facilities on the pavement or in the bus.
The situation is little better in bus and coach
stations where lack of space is limiting the number of departures
from designated stands. This is limiting service growth in the
West Midlands and is also a problem at Victoria Coach Station
in London at peak times.
Disability Discrimination Act and Easy Access
Bus operators have been at the forefront of
purchasing new easy access low floor vehicles that will meet the
requirements of the Disability Discrimination Act. However there
is no pressure on local authorities to improve bus stops and access
to bus stops to maximise the benefits from easy access buses.
In fact it appears that local authorities can
avoid many of the requirements of the DDA as they apply to transport.
Many improvements can be achieved through partnerships
between operators, local authorities and other interested parties.
Partnerships which will often involve co-operation between operators.
In the past this co-operation has not been approved by the regulatory
authorities (OFT, MMC).
The bus and coach industry has been experiencing
a staff shortage, which has been temporarily exacerbated by the
lengthening in time of the training requirements. TWM has implemented
a major training programme to considerably increase the number
of drivers been changed, not only to cater for normal staff turnover
but also to allow for expansion in services.
Role of Express Coaches in an Integrated Transport
There appears to be a lack of recognition at
the local and national political level of the potential role of
scheduled coach services in providing the customer with effective
choice of public transport mode for medium and long distance journeys.
This means that coaches are often not included in developing transport
and traffic management plans.