Metro Magazine, September/October 2019

55 SEPTEMBER OCTOBER 2019 METRO MAGAZINE COM rollingstockmover com 8008009274 SAFELY PUSH OR PULL OVER 225 TONS Move heavy rolling stock with Power Pusher Choose the exact model you need from several options with capacities from ton to 225 tons 2019 Nu Star Inc Visit Us in Booth 3145 Industry analysts can only speculate what strategic moves come next Will the new owners push to expand their market share even if this means more aggressive fare discounting Or will they focus on consolidating past gains and strengthening operating margins The answer is anything but obvious since bus travel is only beginning to emerge from a period of soft demand Either way expect shifts and surprises over the next 12 months RETAINING A SPIRIT OF INNOVATION For both Greyhound and Megabus the frenetic expansion that took place between 2008 and 2014 which was sustained by their deep pocketed owners investing heavily in new services is now only a distant memory Both lines have nonetheless remained innovative and opportunistic Tech oriented enhancements including Megabuss introduction of reserved seats Greyhounds industryleading bus tracker system and the introduction of e tickets on both lines have raised the bar on customer expectations But the latest financial results show that margins remain distressingly thin Stagecoach reported a 32 drop in its North American revenues which includes its charter and school bus service for the six months between April and October 2018 There was a 17 drop in like for like revenue at its North American Megabus unit and revenues for other scheduled service on the continent dropped by an equal amount Some of the revenue decline appeared to be partially attributable to competition from new bus lines particularly in the Northeast and Southwest The slump appears to have precipitated Stagecoachs decision to sell to Variant which last December agreed to pay 271 million a transaction completed in April Stagecoach did not report results for Megabus for the months leading up to the sale but revenues for North American business as a whole appear to have been flat Although Variant has yet to play its hand most expect it to study its options deliberately before making a move With the busy summer travel season here and signs of a recovery in the air there are good reasons for patience The latest uptick in fuel prices has been beneficial to bus companies due to their comparative fuel efficiency relative to cars and planes FirstGroups impending sale of its iconic Greyhound unit was similarly motivated by disappointing results In its May earnings report FirstGroup cited challenges ranging from low oil prices over most of the period to increased competition from low cost airlines Operating profits during the fiscal year dropped from 328 million in 2018 to this year while revenues fell 7 in part due to cutbacks in western Canada The operating margin narrowed to 17 down from 36 The planned sale of Greyhound announced in June is being touted as a way to unlock value and allow it to focus more intensively on its contract and school services The recent financial results notwithstanding the latest news from Greyhound brings optimism heralded by its hiring of a new chief commercial officer with air travel experience and the adoption of an airline style revenue management system investments that are apparently paying dividends Revenues from the U S Mexico border region have also been rising due to the growing business of