Thousands of Stagecoach drivers furloughed as £167m bus bailout revealed

Transport group Stagecoach is furloughing more than half its bus drivers and engineers to slash costs, but has welcomed news of a UK government bailout for the industry which will help keep services running after passenger numbers collapsed.

Stagecoach is one of the biggest bus operators in the UK with extensive routes in Scotland. Picture: Scott Louden

The Perth-based group, which employs more than 22,000 people across its bus operations, revealed that fares collected outside London are running at just 15 per cent of “normal” levels amid the coronavirus pandemic.

As well as furloughs, the group is temporarily winding down its megabus.com inter-city coach services in England and Wales and will suspend all services by Sunday although services will continue to run in Scotland.

News of the cuts, on top of senior executives at the company reducing their pay, came as the UK government announced a support package worth up to £167 million for regional bus operators in England, in addition to commitments already made by the Scottish and Welsh governments.

The bailout package aims to ensure services operate. Stagecoach said the decision will “enable key workers to continue to travel” while fellow Scottish-based operator FirstGroup confirmed it has received “the necessary support to continue running bus services”.

Under the funding scheme, operators will be required to maintain up to 50 per cent of normal service levels and allow adequate social distancing between passengers.

In addition to the furloughing of drivers and engineers, Stagecoach said other employees have also been sent home and it effectively ruled out dividends for the rest of the year.

The group has cut its planned capital spending for this financial year from £105m to just £40m but stressed it had around £506m of available cash and undrawn bank facilities.

Chief executive Martin Griffiths said: “We are continuing to work hard to ensure Stagecoach comes through this difficult period well placed for the significant long-term opportunities that we still see for public transport.”

Matthew Gregory, chief executive of Aberdeen-based FirstGroup, said the funding support from the UK and Scottish governments “will enable us to continue working closely with councils and our other local stakeholders to ensure that key workers can reach their destination”.

However, FirstGroup came under attack from transport union RMT over comments made by chairman David Martin in a call with investors early last month.

The RMT rounded on Martin’s comments around “maximising shareholder value and providing the ability to create substantial returns to shareholders”. The union’ general secretary, Mick Cash, said: “Executives are crowing over shareholders’ payouts for this year, all ultimately courtesy of the taxpayer.”