(05/06/2019 22:18)Winston Wrote: [ -> ]Yes, the contract is losing money, big money, as I understand it, it doesn't matter what the passenger loadings are like, as it's not First that receive the revenue, that's the problem it's an operating contract. I've heard that it's not worth taking on the Vantage contract unless a break clause on the current contract can be negotiated to exit early or re-negotiate early, hence my earlier comments.
As Manchester will be going Euro 6, most of the depot fleets will either need replacing or upgrading. The Hybrids are high spec, I understand that the new electrics will only free up 5 Hybrids for use elsewhere, but that plan may change depending to who & when Bolton is sold.
As I understand it operators put in a bid when Vantage was going to become a reality around 12 months or more in advance. The FirstGroup bid was extremely low, Stagecoach expressed an interest and the other bidder was Arriva North West. Stagecoach walked away as the FirstGroup bid was too low and they believed they couldn't compete for it and make a profit and FirstGroup was named preferred bidder for obvious reasons, I understand the first half of the contract is at a loss to FirstGroup but not of vast sums, in the second half its supposed to break even and then eventually return a small profit, but as we are past more than half of the first half the remainder is not as bad as it might look. If it was that bad and First wanted to pull out of Bolton and TfGM insists on rebidding if the contract is past on why do FirstGroup simply not pull out of it and hand it back to TfGM seeing as they have nothing to lose in your words?
I understand that all 25 vehicles are there for 5 years so after another 22 months that fleet becomes redundant, so if Bolton and those are still together they will become part of Bolton's main fleet, unless other depots are part of the same network (Oldham??? Rotala??? Go North West ???), no doubt they would spread them around perhaps, but they are worth having as by that time it will be a crucial point in conversion to Euro 5 as a minimum and the fact that they exceed that and are Hybrid into the equation means they will be useful additions to stock and could replace a large section of the fleet as in future new vehicles are likely to be bought outright by TfGM instead so therefore no outlay and they would be able to distribute them to other operations in the TfGM area or sell them on the open market if they desired.
I understand that First is also renegotiating the contract currently to get more money to cover extra operations involving the extra 10 electric vehicles due around Christmas time if everything goes to plan, so that might alter the profitability of the contract also. Of course all that is presuming they still have it by then. Maybe Rotala, Arriva and Stagecoach might try if First are forced to walk away.
The big loses at Bolton come in the form of the Bolton to Manchester routes because of heavy rail and bus competition on them and the failure to match things like price, time keeping and also quality and poor customer service systems, e.g. the customer information line being based at Leeds, everything the company has done to try to reduce costs have ended up making things worse and instead increasing costs.
The main issue is poor overall management, regular changes of managing director for no good reason, and poor morale of driving and mechanical staff which doesn't reflect well on the public.
The withdrawal of key town routes at Bolton either doesn't help as they;ve failed to recognise that people who get routes like the 575 might buy a FirstDay for onwards travel into Manchester and by doing so they have lost that custom who then have decided they may as well use the train from Horwich Parkway for example. Those figures lost are big £5.00 here and there overall is a lot of money, I note Go Ahead are already talking about service enhancements and moral has picked up no end, similar happened when Lothian bought Musselborough Depot from First, the staff moral picked up no end and service go better, not back to what it once was, but to what was bringing in profit by enhancement, even night services now run into places like North Berwick. That is whats needed with the business going forward, surely operating buses in Bolton isn't rocket science and a town the size of Bolton plus other surrounding area's in Bury, Rochdale, Wigan and Salford should ideally bring in a decent profit. But unfortunately they've let things slip with there eye off the ball and let other operators walk away with substantial chunks of what should be there's eg Arriva, Rotala, Stagecoach, Transdev, Tyrers and Vision Bus over about a ten year period.
Also the other issue with Bolton is that the Wigan operations complemented them and actually made a profit be it small, yet First failed to grasp that and sold it on to Stagecoach after treating the public in Wigan and Leigh badly with a fleet of old bangers and high fares, after running it well till 2000 when HQ at Aberdeen demanded the new buses that were at Wigan to go to Aberdeen depot to support a Volvo maintenance contract, something Wigan's fleet never recovered from.
I think any operator taking over will need a plan of action to deal with issues at Bolton, Bury etc to bring operations back into profitability given other operators have replaced some parts of the network and First vehicles really now don't operate anywhere North of Bolton which is a large chunk of the town.
Of course First could walk away and hand Vantage back to TfGM and let Arriva Bolton, Stagecoach Wigan, Rotala, Transdev and Vision register over everything they have, but the fact they haven't done yet means there may be some hope there all be it slim. A fragmented bus network any further would be terrible news for the people of Bury, Bolton, Atherton and Leigh and is something I wish not to see. Car usership would increase further and also the bus network would only end up operating largely in Monday to Saturday day times only, on what the operators believe they can make a profit on, through ticketing would end or the price of fares would rise as people would then need the more expensive TfGM Day Ticket in order to interconnect something already an issue in Leigh and Bury. Lets also not forget Bolton has no Metrolink network either so that's not an option either.