RATP has placed its London operations 'under strategic review'

[MotCO]

My London reports that the parent company of one of London's biggest bus operators has placed its London operations 'under strategic review', signalling it is considering shutting them down or selling them off. RATP Group, which is the Parisian equivalent of TfL, is the majority shareholder in RATP Dev Transit London which runs hundreds of TfL bus routes under its London United, London Sovereign, London Transit and Quality Line brands. The report refers to the strike for more pay last year which resulted in a 10% pay award. Given TfL's finances, I doubt that this increase was funded by TfL, so RATP presumably have to make efficiency savings to cover it.

Commuters using London buses face disruption as operator considers selling up

EXCLUSIVE: The Parisian equivalent of TfL appears to be falling out of love with its London buses

www.mylondon.news

The parent company of one of London's biggest bus operators has placed its London operations 'under strategic review', signalling it is considering shutting them down or selling them off. RATP Group, which is the Parisian equivalent of TfL, is the majority shareholder in RATP Dev Transit London which runs hundreds of TfL bus routes under its London United, London Sovereign, London Transit and Quality Line brands. In the event of a sale or withdrawal, there could be some disruption.


In a letter seen by MyLondon, RATP Dev Transit London managing director Bill Cahill explains to colleagues: "As you are all aware the bus market and wider transport sector in London have faced, and continue to face many challenges - from rising energy prices to record inflation and driver shortages - all of which have resulted in service issues and penalties. This situation has intensified over the past year impacting our business significantly. This situation is not sustainable long term."



In September, after a series of bus strikes and sustained industrial action from 1600 of its bus drivers in the Unite union, the company agreed a 10 per cent pay increase, up from the initial offer of 3.6 per cent. As a result of the service disruption, TfL was able to withhold some of the payments it issues to the company for the running of bus services on its behalf. London Transit, one of the RATP Dev brands was the worst-performing bus operator of TfL services in recent league tables.

 

[Simon75]

Though RATP was owned by the French government, and not public transport body ?

 

[ChrisPJ]

It's probably becoming too much effort for euro companies after brexit, see also Abellio big pay rise and constant rumours that DB want out of Arriva.

 

[fgwrich]

It's probably becoming too much effort for euro companies after brexit, see also Abellio big pay rise and constant rumours that DB want out of Arriva.

To be fair, DB has wanted to dump the UK operations ever since it bought Arriva (only buying them for their European operation). They've just been unlucky (or lucky depending on your view of Arriva) in that no-one so far has wanted it!

It does raise an interesting question though, who would be in the market to buy RATP Dev Transit London (or all of RATPs UK operations). First does seem to be on a buying spree, but would they want to return back to London?

 

[WatcherZero]

Though RATP was owned by the French government, and not public transport body ?

Its the Paris councils direct transport operating arm though its commercial operations have spread far and wide since then. The abbreviation stands for Regie Autonome des Transports Parisiens or 'Paris self governing area transport' and its akin to the operational side of Transport for London. The planning/co-ordination side is done by another entity called Île-de-France Mobilités which controls national rail operations in the city and regulates commercial transport operators.

Other national level public transport operators also have commercial arms such as Abellio is the commercial arm of Nederlandse Spoorwegen the Dutch national public transport operator, Deutsche Bahn in Germany, etc..

 

[TheGrandWazoo]

To be fair, DB has wanted to dump the UK operations ever since it bought Arriva (only buying them for their European operation). They've just been unlucky (or lucky depending on your view of Arriva) in that no-one so far has wanted it!

It does raise an interesting question though, who would be in the market to buy RATP Dev Transit London (or all of RATPs UK operations). First does seem to be on a buying spree, but would they want to return back to London?

The problem with DB and its disposal of Arriva (and they are looking to dispose of in-toto) is that they don't have a clear strategic view as to what they want to do. Firstly, it was an IPO (Initial Public Offering), and then a more conventional sale to a financial institution. They probably need to sell something, but that could easily be their freight arm, DB Schenker. Then there's the issue of not really understanding the UK market (risk vs reward) and the pressures of capital investment in the absence of a low-risk return though in RATP's case, even a regulated model is proving to be quite risky!

Not certain that First is a likely purchaser or on a buying spree. They've bought Ensignbus... They've sold First Scotland East and closed Southampton recently.

 

[Volvodart]

At the last results presentation they said that they had a few things in the offing concerning growth, which may or may not lead to anything.

 

[TheGrandWazoo]

At the last results presentation they said that they had a few things in the offing concerning growth, which may or may not lead to anything.

Think the growth segment was more about the opportunities with franchising (probably with an eye on GM) and the B2B world (so perhaps if Sizewell C does come along). That and spending capital on decarbonisation and electrification

 

[Surreyman]

RATP - London, in the form of London United, London Sovereign and more recently London Transit have recently lost a load of recent Route awards,
They have just lost: -
H91 to Metroline
142/642 to Metroline
H32 to Abellio
N97 to Go-Ahead

In the pipeline: -
265 to Go-Ahead (from July 2023)
404 to Abellio (from Sept 2023)
H17 to Metroline (from Sept 2023)
229 to Metroline (from Sept 2023)
223 to Metroline (from October 2023)
228 to Metroline (from Jan 2024)
9/N9 to Metroline(from Jan 2024)

Is it because their bids have been on the high side?

 

[Tetchytyke]

I wonder if this is another benefit of Brexit, after we recently saw Abellio leave the UK via a management buyout. Can’t help but wonder if the same will happen here.

 

[Dai Corner]

I wonder if this is another benefit of Brexit, after we recently saw Abellio leave the UK via a management buyout. Can’t help but wonder if the same will happen here.

On the other hand, Stagecoach is now German owned.

 

[su31]

I'm old enough to remember London United's MBO in 1994 and its subsequent purchase by Transdev. That then led to the amalgamation of Transdev with Veolia and the name being changed to RATP. It's certainly been around the block but maybe it's time for another MBO.

 

[Simon75]

I know TFL have money troubles, but could they take control of RATP Dev ?
Didn't London Transport fo it years ago take back control of a company?

 

[MotCO]

I know TFL have money troubles, but could they take control of RATP Dev ?
Didn't London Transport fo it years ago take back control of a company?

TfL had East Thames buses as its operator of last resort, but sold this company to Go Ahead.

 

[WibbleWobble]

Its the Paris councils direct transport operating arm though its commercial operations have spread far and wide since then. The abbreviation stands for Regie Autonome des Transports Parisiens or 'Paris self governing area transport' and its akin to the operational side of Transport for London. The planning/co-ordination side is done by another entity called Île-de-France Mobilités which controls national rail operations in the city and regulates commercial transport operators.

RATP is owned directly by the French Government via an asset management subsidiary, just like the rail operator SNCF and other major national infrastructures.

It would be akin to London Underground being owned by the British Government instead of Transport for London.

 

[ChrisPJ]

That then led to the amalgamation of Transdev with Veolia and the name being changed to RATP.

Transdev is still transdev but I think London United was sold to RATP (different French organisation) at the time of merger? Then there was Bournemouth Yellow Buses which was also Transdev at one point and RATP at another. From what I can remember anyway.

 

[WibbleWobble]

Transdev is still transdev but I think London United was sold to RATP (different French organisation) at the time of merger? Then there was Bournemouth Yellow Buses which was also Transdev at one point and RATP at another. From what I can remember anyway.

Veolia and Transdev merged to form "new" Transdev. As part of this, RATP was offered the London United and Yellow Buses operations as well as an Italian and several French businesses, instead of taking a cash payout for their shares. London Sovereign was acquired later.

 

[GusB]

There isn't much discussion about the strategic review of RATP's London operations - please remain on topic.

 

[E-Rail]

It'll be interesting to see what RATP plan for Tootbus given this review and likely exit from London. Its much slimmed down post Covid and I believe its Wandsworth depot will also be closed shortly having been sold for redevelopment.

 

[317 forever]

RATP - London, in the form of London United, London Sovereign and more recently London Transit have recently lost a load of recent Route awards,
They have just lost: -
H91 to Metroline
142/642 to Metroline
H32 to Abellio
N97 to Go-Ahead

In the pipeline: -
265 to Go-Ahead (from July 2023)
404 to Abellio (from Sept 2023)
H17 to Metroline (from Sept 2023)
229 to Metroline (from Sept 2023)
223 to Metroline (from October 2023)
228 to Metroline (from Jan 2024)
9/N9 to Metroline(from Jan 2024)

Is it because their bids have been on the high side?

You are right about these losses, except that it is route 251 not 229 lost to Metroline in September. Route 229 is an Arriva route elsewhere in London.

Unless a new or familiar player comes in, such as National Express or an international company not yet present in Britain, we could have piecemeal divestments to existing operators. RP is on a lease of up to 10 years and is rumoured unsuitable for electrification. We could then have for example CO/BT/SO divested to Go-Ahead, X/S/V/AV/FW to Stagecoach and FW/TV to Metroline. Transport UK Ltd, the management buy-out of Abellio, may not be sufficiently established and may meet with too many competition concerns to be in the running for any acquisitions from RATP.

 

[Simon75]

You are right about these losses, except that it is route 251 not 229 lost to Metroline in September. Route 229 is an Arriva route elsewhere in London.

Unless a new or familiar player comes in, such as National Express or an international company not yet present in Britain, we could have piecemeal divestments to existing operators. RP is on a lease of up to 10 years and is rumoured unsuitable for electrification. We could then have for example CO/BT/SO divested to Go-Ahead, X/S/V/AV/FW to Stagecoach and FW/TV to Metroline. Transport UK Ltd, the management buy-out of Abellio, may not be sufficiently established and may meet with too many competition concerns to be in the running for any acquisitions from RATP.

What's RP, CO etc please?

 

[317 forever]

What's RP, CO etc please?

Garage codes, so ..

RP Park Royal
CO Canons Park outstation
BT Edgware (formerly BTS)
SO Pinner (formerly Sovereign)
X Westbourne Park
S Shepherd's Bush
V Stamford Brook
AV Hounslow
WK Hounslow Heath (formerly Westlink)
FW Fulwell
TV Tolworth

Oh, apologies for giving Fulwell 2 suitors! I meant WK to Stagecoach and FW to Metroline.

 

[Snow1964]

What's RP, CO etc please?

They are garage codes.
RATP has following

AV Hounslow
BT Edgware
CP Canons Park
FW Fulwell
JE Wandsworth
RP Park Royal
S Shephards Bush
SO Harrow
TV Tolworth
V Stamford Brook
WK Hounslow Heath
X Westbourne Park

 

[MotCO]

Would Transpora be interested in operating TfL routes? Their standalone tourist bus is a very small operation.

 

[Surreyman]

You are right about these losses, except that it is route 251 not 229 lost to Metroline in September. Route 229 is an Arriva route elsewhere in London.

Unless a new or familiar player comes in, such as National Express or an international company not yet present in Britain, we could have piecemeal divestments to existing operators. RP is on a lease of up to 10 years and is rumoured unsuitable for electrification. We could then have for example CO/BT/SO divested to Go-Ahead, X/S/V/AV/FW to Stagecoach and FW/TV to Metroline. Transport UK Ltd, the management buy-out of Abellio, may not be sufficiently established and may meet with too many competition concerns to be in the running for any acquisitions from RATP.

Apologies my mistake re 229/251.
Ref your suggestions on possible divestments, I know it has been discussed on here before but what about Tfls attitude to market share? - last time I checked Go ahead had about 25% of total London market(may have changed in the last 18 months?) Stagecoach & Metroline might be better placed and if First wanted to re-enter London market - no issue, ditto National Express.
It has been stated by some that there is no official policy from Tfl, I have also heard that 25% is the limit.
It might well be that economically, now is a bad time for any company to be investing in major bus companies.

 

[317 forever]

Apologies my mistake re 229/251.
Ref your suggestions on possible divestments, I know it has been discussed on here before but what about Tfls attitude to market share? - last time I checked Go ahead had about 25% of total London market(may have changed in the last 18 months?) Stagecoach & Metroline might be better placed and if First wanted to re-enter London market - no issue, ditto National Express.
It has been stated by some that there is no official policy from Tfl, I have also heard that 25% is the limit.
It might well be that economically, now is a bad time for any company to be investing in major bus companies.

From what I've heard, including on the London bus forum, there is not an official 25% limit. Go-Ahead has occasionally gone a little above. I think Cowie did just after purchasing British Bus in 1996.

However, if an operator is too dominant following a local acquisition, this can lead to some routes in the area being lost upon retender. For example, after Metroline took over most of First CentreWest several routes in the area were lost to RATP or Abellio.