Diamond Bus North West

[gilesbus1]

RE: Diamond Bus North West

(11/07/2019 17:17)Nwales Bus Wrote:  Seems to be a bit presumptuous that these divisions will be sold and to whom would be interested in purchase. Some of your predictions do see very far fetched, Scotland councils are allowed to create new municipal bus companies however in times of austerity purchase prices for operations such as First Glasgow is going to be too high.

Although RATP have just sold their Bournemouth Transport division to a management buyout consortium, I can’t see a explosion of management by-outs across the country. The capital costs are too high.

Depends on how its done, of course opps might sell to anyone, what people need to be aware with, with nay Arriva buyout is that 4 of the 5 bids are by companies classed as Venture Capitalists, what they do is they run companies for a limited time and break them up in order to raise capital, indeed I have worked for a Venture Capitalist in the past, that is how a venture capitalist company makes a profit. Without more new start companies of which some would need to be formed out of Management Buy Outs there are not enough operators to take over the assets of Arriva or FirstGroup, and they simply just won't be allowed to close unless its some sort of Municipal operation, The two large Private firms to form in recent years are of course Rotala and Centrebus plus various other firms Julian Peddle has interests in around the Midlands, what extend particularly the later could grow is unclear, and it is also thought that some European Companies are losing interest due to Brexit. RATP appearing to be an example.

Also remember that many companies in the home counties have a tendency to lose money, due to high wages, high property costs and low passenger usage basically most of the network in Surrey has been decimated over the past 25 years with all but Guildford London Country garage being sold off for property redevelopment, and most of the school routes being in the hands of coaches, but that's market forces due to price and demand. Hertfordshire similarly saw similar to Surrey in terms of several garage closures but the operators did remain on more economical smaller sites. So in terms of those area's it would be interesting to see.

Modernising garages doesn't save them I can think of several new London transport depots that were closed within a few years of modernisation, simply because they were in the wrong place or with the wrong operator for contract work, take Streatham and Norbiton for example. They may be tendered but in the deregulated market did modernisation or new garages save Bury or Rotherham, Altrincham or Tameside? So repairing a roof will make no difference 3 years down the line but be quite blunt.

Of course there will always be buyers for profitable city area's like West Yorkshire, Merseyside, Bristol and Glasgow but what happens when the City area loses money hand over thist, remains to be seen.

There might also in large Cities be environmental considerations as well as large City Regions have there own mayors with responsibilities to clear the atmosphere in their own regions, that may add other complications, Glasgow, Manchester, Birmingham and Bristol already have plans, and Liverpool is to follow and also probably Leeds, Edinburgh, Tyne & Wear and Sheffield, and of course London has already implemented its scheme. This may mean large bills for new fleets of buses which may cause again the boom and bust in the bus manufacture-ring industry. Cheaper oversea's bus builders from China and Turkey may need to be used in order to meet demand, recent orders from Yutong seem to suggest this will be an increasing trend and a way of getting new buses cost effectively and quickly.

So the industry will change and operators will change over the next few years, and recent take-overs and sales will not be the last.

The problem with the early deregulation operators and groups is they bled their business' dry and now they have nothing to show shareholders but lots of expenses forecoming through change in policies and change in market place, within 10 years the bus industry will be very different and FirstGroup and Arriva will have left the UK Bus market to be replaced by new smaller entrants, possibly as side wings to Venture Capital Organisations who will maintain ownership for only a few years then sell on, but that is that.