Bus firms may have to put off replacing ageing vehicles after huge fall in passengers due to pandemic
Operators saw passenger numbers fall by about 90 per cent at the height of the pandemic and have only recovered to about 20 per cent of pre-lockdown levels in recent weeks.
Cashflow became so bad the government had to step in with its own emergency funding package, while council leaders were asked to keep paying subsidies for elderly and vulnerable travellers – even though they had been told to stay home and off public transport.
And while it may have provided a temporary fix, continued tight finances could have other knock-on effects for commuters.
“At the moment, bus companies will be finding it very difficult to put money aside,” said Tobyn Hughes, managing director of Transport North East.
“I’m not sure what the Department for Transport requirements are, but the lack of profitability in this sector will potentially have longer lasting ramifications.
“Expenditure on new buses, for example, will be harder for companies to justify in the future.”
Hughes, who is also managing director of Metro operator Nexus, was speaking at the meeting of the North East Joint Transport Committee’s Overview and Scrutiny Committee on Thursday, June 25, which was held by videolink and broadcast via YouTube.
Since the start of the COVID-19 lockdown, North East councils have kept up weekly subsidy payments worth about £1.5 million for concessionary travel in the region, despite a collapse in the number of concessionary travellers.
According to a report for the committee, before the crisis almost two thirds of funding for bus services came from passenger fares – this now accounts for just five per cent, with the rest provided by the government and councils.
Hughes added that although plans to further ease social distancing restrictions could improve the outlook for public transport, capacity for commuters would still be limited to about 50 per cent.
He said: “It’s undoubtedly the case that while any form of social distancing is there and while demand is suppressed because the economy hasn’t recovered, it means the bus industry will continue to be challenged and will require public support at greater levels.”