It’s as close as you’ll get to celebrity gossip in the bus world, as details emerged of a coming-together – potentially – of National Express and Stagecoach. Two of the UK’s “big 5” getting hitched? Is this a marriage of convenience, or an exciting glimpse into the future? And what’s in it for the passengers?
These are fascinating times for the bus industry. Covid has slapped the industry hard, and whilst optimistic reports put recovery at up to 75% of pre-pandemic loads, business leaders are sweating about what might happen next, once the umbilical cord of Government support is finally snipped in the not-too-distant future. For us pandemic-weary individuals, the next “crisis” is rapidly rolling into view – the climate. And it’s here the battle-scarred bus industry has a chance to grab a leading role in a future less-dominated by cars and co2.
For passengers, the future – potentially – is rosy. The Government’s Bus Strategy calls for more partnership working, more involvement from local authorities and more simplification. What’s not to love? The scene at the coalface, however, has yet to be filmed. The uneasy truth to this plot is that, inevitably, if we want the bus to shine, it has to take the leading role – ahead of the car, with all of it’s film-star looks and charm.
That’s the main feature, yet to come. In the meantime, we have the warm-up feature – a potential link-up of two big bruisers of the transport world.
Both have had their ups and downs. Stagecoach tried to conquer America, but has since retreated to blighty. It’s involvement in rail saw it famously running the first privatised service, then hopping into bed with Richard Branson to operate Virgin Trains. Old beardy went off to space, and Stagecoach created it’s own space – away from UK rail operations – the only metal on metal left is the Sheffield Supertram. The company is currently involved in a shouting match with Manchester Mayor Andy Burnham over his plans to franchise bus services in the city, taking one of Stagecoach’s golden eggs in the process.
National Express too has had it’s highs and lows. On the railways, it failed spectacularly on the East Coast franchise, leading to such a downfall that it’s bus repainting programme stayed shortly as all-over white as Stagecoach – of all companies – circled for a takeover of it’s own.
That ultimately didn’t happen, and National Express recovered under the leadership of the now-departed Dean Finch. It re-entered the rail market – albeit in Germany – and it’s famous white motorway coach network and West Midlands bus business now represent only around a fifth of the group – bus and coach operations in Spain and the US are bigger fish for the company.
Yet the UK promises much, as we climb out of covid and tackle air quality, the Government is expecting big investment in electric and hydrogen buses. It is here where a merger of these two giants makes a lot of sense. A huge company will have larger buying power and combined expertise and experience, putting it in a strong position to deliver.
Much of the corporate gains will be “back office”. For passengers, not a huge difference – at least in the short-term. The recovery from covid will be uppermost in boss’s minds, as well as the hopefully short-term issue of driver shortages, which are having a poor effect on passenger’s experiences, just as they return to the shops and offices.
But in the longer-term, might it be an opportunity to refresh the brand? Already talk amongst bus enthusiasts has turned to what any new company might be called. It’s too early to even think about such things, as such, but it may well be a decent opportunity once the dust settles to “localise” some bus operations, and bring some local branding into view. First appears finally to have learnt the lesson that corporate bland image does not endear local bus user – is Stagecoach in danger of also having that remote, cold, corporate image?
And what about consumer interest? Might the Competition and Markets Authority cast it’s beady eye over proceedings? The only bus operations that might be of concern are in the Coventry and Warwickshire area. Might a new concern have to divest itself of either National Express Coventry or Stagecoach Warwickshire? Coventry has new electric buses, and has designs on the city being an all-electric bus operation, so I would suspect Stagecoach’s Warwickshire operations might be more likely to go, although The Times thinks it unlikely that the CMA would take any interest at all. Another consideration is that with Government policy now based on co-operation rather than competition, and much more closer working with councils, is the bus industry seen as being in “competition” at all? And if it is, the “competitor” is surely the car? The more likely is the removal of Stagecoach’s MegaBus scheduled coach service. This competes head-on with National Express on several corridors. Here, the one to watch is German disruptor FlixBus, whose green coaches are increasingly a common sight on mainland Europe, and has already declared war on National Express’s long-established UK coach network which, apart from the aforementioned MegaBus has had little in the way of meaningful competition for a long time.
Combined expertise of the 2 companies can also benefit the user. National Express West Midlands has upped it’s game in recent years (at least before covid struck) with major investment in new, well-appointed vehicles. A recent fares reduction places it amongst the cheapest operators in the country, and users have been fairly well-insulated against major cuts seen in other parts of the country. Stagecoach, for it’s part, is well-known throughout the industry as being a solid performer over the years. It may have been seen as losing it’s way a little since founder Sir Brian Souter left the leadership helm, but it’s sheer size and coverage leaves it still a major player.
If this merger succeeds, what of other players in the industry? We saw in the communications industry that the joining of BT and EE led swiftly to a amalgamation of O2 and Virgin Media/Liberty Group. Might we see a newly re-focused FirstGroup take on all or part of a seemingly moribund Arriva, still the seemingly unloved child of DB? What of Go Ahead, seen by many as a class act, as the 5th member of the “big 5”? Others could possibly be ripe for merging – mid-sized Wellglade, owners of the well-regarded TrentBarton, Rotala, with it’s ever-growing Diamond brand and Preston Bus, and Transdev – seen by many as a model of excellence across large parts of the north – are all operators of note beneath the big 5 that also should be watched.
The smaller independents are a concern. Back in 1986, Thatcher saw her deregulation plan as one that might see hundreds of small concerns providing bus services. It never really turned out that way, but small independents have, in many examples, provided the life blood of buses in many often rural communities. For myriad reasons, these small operators now face real challenges – and the ones in urban locations may find that new “supergroups” are just too much to handle, especially if currently competing directly against them. Finding new routes and markets is tricky at the best of times.
How “Bus Service Improvement Plans” pan out is yet to be seen. They promise a lot on paper, but what they end up delivering is anyone’s guess. But the merging of National Express and Stagecoach might yet prove to be the opening salvo of an industry that quickly needs to reshape and restructure itself in order to insulate for the longer term and many challenges ahead. If it means it brings the power to be there for passengers for the long-term, we must wish it well.