Stagecoach pushes for further easing as buses remain less than half full

The chief executive of Perth-headquartered transport operator Stagecoach has said he hopes lockdown restrictions on bus passenger numbers will be lifted “sooner rather than later” as services remain less than half full.

Perth-based Stagecoach is one of the biggest bus operators in the UK and a familiar name on the streets of Scotland. Picture: Scott Louden

Martin Griffiths said physical distancing capacity restraints need to be eased as soon as possible and government messaging on public transport should encourage people to get back on buses.

He noted that bus passenger numbers had recovered a little since the height of the lockdown, when they were 90 per cent lower than a year earlier, but said they are still 60 per cent down year-on-year due to distancing measures and despite the mandatory wearing of face coverings.

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Griffiths warned that he expects a “lasting effect” from the coronavirus pandemic on demand for public transport as it has accelerated the trend for long-term home-working.

He said the challenge is “to get people out of cars and on to buses” after being told to avoid public transport amid the lockdown.

“At the right time, it’s going to be important that we get people back on public transport and have the right messaging and information campaign, and I hope that happens sooner rather than later,” Griffiths added.

The group, which employs some 25,000 people, confirmed that it was cutting costs to weather the storm and furloughed up to 55 per cent of its drivers and engineers at the height of the lockdown.

While many have been returning to work as services have increased, about 20 per cent remain on furlough and the company refused to rule out job losses.

Griffiths’ comments came as Stagecoach reported statutory pre-tax profits falling to £40.6 million in the year to 2 May from £101.2m the previous year as results took a hit from Covid-19 as well as the ending of its rail operations in the UK. Underlying annual pre-tax profits were down 32 per cent at £90.9m.

The group maintained its interim dividend at 3.8p per share, paid out in March, though no further payments are being made this year.

“We recognise the importance of dividends to many shareholders and it is our ambition to resume dividend payments in due course,” it added.

John Woolfitt at Atlantic Capital Markets noted: “Many may take the view that a public transport company offers few if any prospects as an investment. While this may have been true in the past for some transport operators, our view is that despite the Covid-19 impact on travel, the government continues to press ahead with initiatives to encourage the general public to reduce carbon emissions by using ‘green’ buses and trains.

“Stagecoach, and its fleet of green buses are very much at the forefront of this push to zero emissions, and as such we believe the group will continue to receive strong support from government at national and local level.”

Earlier this month, FirstGroup, the Aberdeen-headquartered transport giant, came under pressure to accelerate its restructuring after it warned over its ability to continue as a going concern.

The firm, which reported hefty full-year losses, has faced plunging passenger numbers on its bus services amid the coronavirus lockdown as commuters work from home and people shop locally.

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