First Group: General Discussion

[winston270twm]

Falling fuel costs means running a car becomes more affordable. People who turned to the bus (and rail, although the markets are different) as oil prices soared may well return to the car if fuel prices remain low.

When fuel prices soared, First were quick to increase their fares using the rise as justification, when fuel prices fell...... No difference there to many utility companies though.

Fair point, but obviously forecourt prices haven't fallen to the same extent Crude Oil prices due to the amout of tax the Government imposes remaining unchanged. That said fuel is only part of the cost of running & owning a car, the rest of the costs are unchanged.

Exactly, all the big fuel users buy their fuel requirements years in advace so they can budget for it, and obviously get much better prices than us on the forecourt due to comsumption. Any significant shifts in fuel prices will only generally impact the business positively or negatively 2-3 years later depending on how far in advance they are hedged & at what price

 

[robertclark125]

Is First Potteries still managed, and shown on the First Manchester Operators licence?

 

[winston270twm]

Is First Potteries still managed, and shown on the First Manchester Operators licence?

First Potteries is managed as part of First Midlands along with Leicester & Worcester

It has it's own license:
http://www.tan.gov.uk/tanen/vosa_anonymousoperatorsearchdetails_new.asp?txtRequestId=73177

 

[robertclark125]

Cheers for clearing that up Winston.

 

[Baxenden Bank]

hock:

Thanks to a link to the Companies House beta site, provided by a previous poster, I've downloaded and had a look at the First Potteries accounts.

Goodness gracious me. How the mighty has fallen

Period to 31 March 2011 - excluding the discontinued Chester etc. operations - Gross Profit £2.485m

Period to 31 March 2015 - which includes several months of the 'new network' launched in July 2014 - Gross LOSS £1.107m hock:

That's quite a turnaround!

Revenue over the period reduced by 12%, operating costs increased by 3% despite taking approx. 10 vehicles daily out of the fleet.

 

[overthewater]

Your Welcome

So the question has to be were did it go wrong since Pottiries was in good health and wasn't one of the areas causing trouble to First. First would have been better off doing absolutely nothing.

 

[robertclark125]

Well it had maintainence issues, that led to the vehicle licence size being reduced, which allowed some other operators to take advantage.

 

[Robertj21a]

It will be interesting to see the next accounts which will include the closure of Newcastle, reduction in vehicles/pvr and, I assume, there were some redundancies (?)

 

[TheGrandWazoo]

Your Welcome

So the question has to be were did it go wrong since Pottiries was in good health and wasn't one of the areas causing trouble to First. First would have been better off doing absolutely nothing.

I think you'll find it wasn't in good health.

When Nigel Eggleton took over as Midlands MD, he did an interview with Route One in which he pointed out that passenger figures had fallen from 19m to 15m in five years. Meanwhile, the cost base had remained the same with the same fleet size.

He said Leicester and Worcester were in better shape but there were challenges with Hereford because of the high fixed costs of the depot!

If you look at the figures, you'll see that savings in some areas have been offset by increases in depreciation (mainly because they've got some newer fleet). Staff costs are broadly similar as the small reduction in staff has been balanced by pay increases and increases in pension contributions. The interesting aspect is the fuel cost that hasn't really gone down much - again an indication that a) they hedge and b) they have a thirsty fleet.
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Im sure First Glasgow, isn't truly hamstrung by the SB Holdings, only First Scotland East. First Glasgow I think managed to get out of most of it because of all the competition, trains, subway, all those nice other companies. The route which were controlled where because of Scotrail. Can any one prove this to be the case? Especial since the its now a flat fare system in Greater Glasgow and the amount of changes or cuts in certain areas. :-?


Lets look at the accounts:

FIG NO1 Up to March 2015

Turnover...£85,112,000
Cost.........£78,057,000
Profit........£7,055000

FiG No2

Turnover...£42,6792,000
Cost.........£37,815,000
Profit........£3,684 00 Tax and interest payments taken off.


First Manchester This is VERY Interesting.

Turnover...£89,935,000
Cost.........£89,190,000

Net interest receivable and similar charges £2,968 000

Profit on ordinary actives before taxation £3,713, 000
(charge) £708,000

Profit........£3,005, 000

The interesting thing is that there's been the much trumpeted increase in Manchester patronage from fares deals. Not reflected in turnover though

Meanwhile, there's been a 10% uplift in staff costs!

Hence, why I agree with some of the opinion on profit margins etc, getting more people on board isn't the silver bullet.

What Stagecoach are brilliant at is nailing down their cost base. That means they don't need to have such high fares and that promotes usage.

Also, cutting costs doesn't necessarily diminish the product. It could be consolidating depots or just getting rid of stuff they shouldn't be running!

 

[winston270twm]

First Potteries isn't very popular amongst the locals, a lot of them still hate First. The fleet see's very little in the way of new fleet investment, they've recently removed a number of non DDA vehicles with 53/54 Plate E300's ex Worcester, many of which have never been refurbished / re-trimmed since new/ some are still on their original paintwork. There are still frequent service cuts, network coverage is shrinking & day tickets / passes become less useful. Potteries seem to be on a downward spiral of decline, whilst independent operator D&G seem to be frequently expanding thanks to continual cuts by First and the exist of Arriva from it's Wardle's business, D&G operate a modern fleet / frequently buy new buses.

 

[Baxenden Bank]

Well it had maintainence issues, that led to the vehicle licence size being reduced, which allowed some other operators to take advantage.

The vehicle maintenance issues were some time ago (inquiry late 2003, licence reduction 2004). So any impact of that on costs / passenger numbers is ancient history. The impact of the licence reduction was not as great as suggested - most of the cut was licences for which there were no vehicles. The accounts of the time claim 10% of routes were affected - note the use of routes - not the proportion of passengers or revenue. In essence the routes simply transferred to friendly neighbours (X64) or were marginal odds and ends.

Other operators have come and gone and come back again in the intervening period.

I have, for the North Staffs network, for the off-peak requirement, and on a comparable basis.
August 2002 - 237 vehicles (194 First, 43 others)
September 2004 - 210 vehicles (154/56).
March 2008 - 226 (159/67)

Fairly static through to
April 2012 - 221 (152/69)

Then a competitive situation, peaking at
July 2013 - 239 (153/86)
April 2014 - 226 (159/67) immediately prior to the bodged network review
July 2014 - 212 (145/67) - First network review
September 2015 - 178 (124/54) - second First network review
February 2016 - 172 (121/51).

So a decline of buses required across the First and other operators.

There are some boundary definition issues where people may come up with slightly different numbers but mine are for a comparable network area over time. I use off-peak as they are easier to calculate. The peak requirement is not much greater - I cannot get first below 126 for February 2016 but could get it greater with longer lay-over times.

First vehicle requirement was fairly static for a long period (September 2003 to July 2014) so perhaps, with the general decline in bus use over that period, some issues were not being addressed at that time which has led to sudden, drastic reductions today. Why cut today what you can put off cutting until tomorrow? I feel, as a long-term Potteries bus user, let down by the actions of this supposedly professional operator.
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It will be interesting to see the next accounts which will include the closure of Newcastle, reduction in vehicles/pvr and, I assume, there were some redundancies (?)

Far more volunteers than there were positions to delete! What does that tell you about a) staff morale, or b) the generosity of the package on offer.

I'll go with option a.
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....

Also, cutting costs doesn't necessarily diminish the product. It could be consolidating depots or just getting rid of stuff they shouldn't be running!

I would agree, but add that there are some cuts which go beyond 'cutting the fat'.

Reduction (in The Potteries area total removal) of spare drivers / vehicles strips out a cost which looks good, today, on paper but at the same time lowers service quality - the inability to slot in a spare bus as a result of late running, or replacing a driver having to come off sick part way through their daily turn. In the longer term any short term financial benefit is potentially outweighed by an accelerated reduction in passenger numbers (and thus revenue) as they desert an unreliable service. There are only so many times you can be late for work (and lose attendance bonus or even your job) before you make alternative arrangements! There are few people who want to finish work and still be stood outside their warehouse 55 minutes later because the bus now runs hourly. A car driver doesn't have that problem so you make alternative arrangements!

Providing a service which is attractive to existing / potential users and can be relied upon ought to be foremost in the minds of management - throughout the chain of command. Providing an unreliable service, long-term, has only one ending, even in a monopoly environment. That applies to the bus industry the same as it applies to pubs or supermarkets.

 

[TheGrandWazoo]

First vehicle requirement was fairly static for a long period (September 2003 to July 2014) so perhaps, with the general decline in bus use over that period, some issues were not being addressed at that time which has led to sudden, drastic reductions today. Why cut today what you can put off cutting until tomorrow? I feel, as a long-term Potteries bus user, let down by the actions of this supposedly professional operator.
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Far more volunteers than there were positions to delete! What does that tell you about a) staff morale, or b) the generosity of the package on offer.

I'll go with option a.

Well, that does tally with what Nigel Eggleton said a short while after he'd been in post

“Five years ago Potteries was carrying 19m passengers per annum. Now that figure is around the 15m mark. The business has gone backwards, and there are all sorts of reasons for that, but the major one is the economic situation North Staffordshire finds itself in.”

The area’s pottery industry, for long a major passenger generator, has been decimated in recent years, and unemployment is high. Neither is good news for ridership figures, and despite the loss of 4m passengers in five years, Potteries’ cost base remains the same now as it was in 2009.

“We were running 169 buses then, and we’re running 169 buses now,” Nigel explains. “So it was fairly obvious that some major surgery was needed to turn things around. But even at 15m journeys per annum we still carry a lot of people. This is good bus territory. What we need to do is stop the decline, and take things in the other direction.”

I don't know the area well enough but from my infrequent swerves off the A50, it was a fleet characterised with a lack of investment over many years.

I'd be wary of drawing too much of a conclusion on people taking the money and running as a reflection of things. When my "home" depot closed, the number of drivers who transferred was minimal. The reasons being - some had long service and they'd not get the chance to get the cash again esp. at an age when the kids had flown and the mortgage paid, not wishing to work at another depot, hassle of driving for an extra 30 mins at start/end of shift.

I've met Mr Eggleton a couple of times socially and he's struck me as a decent bloke. He has worked in the industry for a long time - however, it's an operation that has been neglected for many years but also not immune from the wider socio-economic issues in the area. Could be a long haul and agree that constant tinkering with networks etc doesn't help one bit.

I do also agree that reliability is the single biggest consideration for the customer. Stagecoach are very tough on cost - and they are excellent on delivering service

 

[Baxenden Bank]

Well, that does tally with what Nigel Eggleton said a short while after he'd been in post

“Five years ago Potteries was carrying 19m passengers per annum. Now that figure is around the 15m mark. The business has gone backwards, and there are all sorts of reasons for that, but the major one is the economic situation North Staffordshire finds itself in.”

The area’s pottery industry, for long a major passenger generator, has been decimated in recent years, and unemployment is high. Neither is good news for ridership figures, and despite the loss of 4m passengers in five years, Potteries’ cost base remains the same now as it was in 2009.

“We were running 169 buses then, and we’re running 169 buses now,” Nigel explains. “So it was fairly obvious that some major surgery was needed to turn things around. But even at 15m journeys per annum we still carry a lot of people. This is good bus territory. What we need to do is stop the decline, and take things in the other direction.”

I don't know the area well enough but from my infrequent swerves off the A50, it was a fleet characterised with a lack of investment over many years.

I'd be wary of drawing too much of a conclusion on people taking the money and running as a reflection of things. When my "home" depot closed, the number of drivers who transferred was minimal. The reasons being - some had long service and they'd not get the chance to get the cash again esp. at an age when the kids had flown and the mortgage paid, not wishing to work at another depot, hassle of driving for an extra 30 mins at start/end of shift.

I've met Mr Eggleton a couple of times socially and he's struck me as a decent bloke. He has worked in the industry for a long time - however, it's an operation that has been neglected for many years but also not immune from the wider socio-economic issues in the area. Could be a long haul and agree that constant tinkering with networks etc doesn't help one bit.

I suggest that Mr Eggleton isn't the problem - he has to deal with the situation he finds himself in. Perhaps he needs to cut some dead wood?

I do think that the network review in 2014 was poorly thought through. Then again a look at the old accounts shows that 'The Overground' network introduced back in 2002 had the same negative impact. Both done by outside consultants, looking at numbers rather than the on the ground realities of The Potteries conurbation i.e. multi-centred.

As an aside, he is wrong about unemployment. Stoke-on-Trent has never really suffered from particularly high levels of unemployment (as measured by official statistics with their own foibles!), even in the depths of the various recent recessions. Rather it suffers from a very low wage economy. Thus there isn't much spare cash around to fund, for example, fare increases well above inflation year after year. Again, a short term paper gain which returned to bite them at a later date.

 

[winston270twm]

I suggest that Mr Eggleton isn't the problem - he has to deal with the situation he finds himself in. Perhaps he needs to cut some dead wood?

I do think that the network review in 2014 was poorly thought through. Then again a look at the old accounts shows that 'The Overground' network introduced back in 2002 had the same negative impact. Both done by outside consultants, looking at numbers rather than the on the ground realities of The Potteries conurbation i.e. multi-centred.

As an aside, he is wrong about unemployment. Stoke-on-Trent has never really suffered from particularly high levels of unemployment (as measured by official statistics with their own foibles!), even in the depths of the various recent recessions. Rather it suffers from a very low wage economy. Thus there isn't much spare cash around to fund, for example, fare increases well above inflation year after year. Again, a short term paper gain which returned to bite them at a later date.

I thought under the new 'First' that local management would be responsible for making the decisions regarding network reviews due to their local knowledge of travel patterns etc

Surely, operating in an economy where people earn low wages, bus patronage should be high as fewer people can afford to own / run a car. This is course is assuming that fare levels match the economy/earnings, a comprehensive network of services are provided that a useful to the travelling public and customer service standards / quality are high.

 

[TheGrandWazoo]

I thought under the new 'First' that local management would be responsible for making the decisions regarding network reviews due to their local knowledge of travel patterns etc

Surely, operating in an economy where people earn low wages, bus patronage should be high as fewer people can afford to own / run a car. This is course is assuming that fare levels match the economy/earnings, a comprehensive network of services are provided that a useful to the travelling public and customer service standards / quality are high.

I thought the old one was done by an outside consultancy (TAS??) but that the recent one was done in-house?

Where incomes are low, patronage is more susceptible to price sensitivity. Also, you are seeing in places the appearance of local foodstores (often of a German persuasion) which also depresses travel.

 

[Robertj21a]

I thought the old one was done by an outside consultancy (TAS??) but that the recent one was done in-house?

Where incomes are low, patronage is more susceptible to price sensitivity. Also, you are seeing in places the appearance of local foodstores (often of a German persuasion) which also depresses travel.

This is where I struggle a bit when trying to understand the Potteries area in general. It is, as mentioned above, an area of relatively low incomes which *should* be good for bus patronage. So why have most of the small independents just disappeared (i.e not taken over) ?

Nigel Eggleton should be quite capable of sorting out a 'basket case' like First Potteries has become but it's a bit like the overall First Group 'Supertanker' where so much has not been corrected, for so long, that it could take very many years to resolve. If annual losses stay about £1m then I can't see him having much say in whether First Group keep hold, or get rid, of it.

 

[TheGrandWazoo]

This is where I struggle a bit when trying to understand the Potteries area in general. It is, as mentioned above, an area of relatively low incomes which *should* be good for bus patronage. So why have most of the small independents just disappeared (i.e not taken over) ?

Nigel Eggleton should be quite capable of sorting out a 'basket case' like First Potteries has become but it's a bit like the overall First Group 'Supertanker' where so much has not been corrected, for so long, that it could take very many years to resolve. If annual losses stay about £1m then I can't see him having much say in whether First Group keep hold, or get rid, of it.

Where there is a lower economic activity, bus patronage usually falls too.

I think you're right about the FG supertanker. Fact is that Nigel Eggleton was appointed in December 2013 which was quite late in the Giles era. The big changes happened in 2014 so the results won't have a full year benefit on there. It'll be interesting to see what the 2015/6 looks like.

However, there are longstanding issues that probably date back to the days when it was just an appendix to the Manchester business. Aside from a few Omnicities, it had precious little investment and much focus was to get DDA compliant; I think we all know what a terrible mess Potteries was in respect of that. They've managed it (just) - the next challenge will be how they manage to update the fleet going onwards and, more importantly, how they manage to stabilise the business.

From what people who live locally seem to be saying, it desperately needs is some certainty and stability, and focus on service delivery.

 

[winston270twm]

This is where I struggle a bit when trying to understand the Potteries area in general. It is, as mentioned above, an area of relatively low incomes which *should* be good for bus patronage. So why have most of the small independents just disappeared (i.e not taken over) ?

Nigel Eggleton should be quite capable of sorting out a 'basket case' like First Potteries has become but it's a bit like the overall First Group 'Supertanker' where so much has not been corrected, for so long, that it could take very many years to resolve. If annual losses stay about £1m then I can't see him having much say in whether First Group keep hold, or get rid, of it.

And me, as the network / services should be changing to match changing travelling patterns. People living in low income areas still need to travel to/from work, the bus should be the most cost effective option, but needs to be reliable & frequent to ensure they get to work on time & is convenient. The expansion of your local Aldi's & Lidl's should provide First Potteries with the opportunity to boost the number of shot hop tickets it sells, the revenue earn't per mile for short distances is more than someone travelling end to end.

Another example of a First basket case is Plymouth that was locked in competition with Plymouth Citybus, had an elderly fleet and saw little or no new vehicles. Stagecoach takeover and they can justify transferring in a large fleet of 14 plate E200's immediately & buying a large quantity of new vehicles of various types including Falcon tri-axle coaches for a brand new service, E200MMC / E400MMC for Park & Ride & standard services. Why can Stagecoach do it, yet First can't? In fact, pretty much the same happened with all the other First businesses that Stagecoach acquired

 

[TheGrandWazoo]

And me, as the network / services should be changing to match changing travelling patterns. People living in low income areas still need to travel to/from work, the bus should be the most cost effective option, but needs to be reliable & frequent to ensure they get to work on time & is convenient. The expansion of your local Aldi's & Lidl's should provide First Potteries with the opportunity to boost the number of shot hop tickets it sells, the revenue earn't per mile for short distances is more than someone travelling end to end.

Another example of a First basket case is Plymouth that was locked in competition with Plymouth Citybus, had an elderly fleet and saw little or no new vehicles. Stagecoach takeover and they can justify transferring in a large fleet of 14 plate E200's immediately & buying a large quantity of new vehicles of various types including Falcon tri-axle coaches for a brand new service, E200MMC / E400MMC for Park & Ride & standard services. Why can Stagecoach do it, yet First can't? In fact, pretty much the same happened with all the other First businesses that Stagecoach acquired

Well, a few things there Winston.

In many of the areas where car ownership was lowest and bus use would've been higher, the arrival of an Aldi or Lidl has removed the need for bus travel, let alone short hops. I don't know the Potteries well (usually only seeing it from the D road or the A50 ) but in other areas, it is a phenomenon that companies are seeing - a big new supermarket appears as a means of serving that community and as a source of local jobs.

As regards Plymouth, there's a couple of things to consider. Firstly, Stagecoach ALWAYS put in new vehicles wherever they go into - it's a hearts and minds exercise rather than based on economics. Remember, when they entered Darlington, 10 new vehicles appeared there. In the next 4 years, only another 7 appeared, and none in the last 8 years of its existence.

Secondly, First did put new fleet into Plymouth at various times up until 2005. Of course, from 2007 onwards, First Group failed to adequately invest in new vehicles. Had it not been for "Moir-led stupidity" in picking a fight with council owned PCB, that could've been a decent solid operation but no, UgoBus appeared and then disappeared and the damage was done. Go Ahead could then see the weakness especially post 2012 and went in for the kill. Stagecoach was a different proposition - peace declared and so fleet renewal is actually achievable (though I confess, the Falcon has caught a lot of people by surprise).

First have actually done a lot of fleet renewal and one area I would point you to was South Wales which was absolutely terrible. Now almost recognisable!

 

[winston270twm]

Well, a few things there Winston.

In many of the areas where car ownership was lowest and bus use would've been higher, the arrival of an Aldi or Lidl has removed the need for bus travel, let alone short hops. I don't know the Potteries well (usually only seeing it from the D road or the A50 ) but in other areas, it is a phenomenon that companies are seeing - a big new supermarket appears as a means of serving that community and as a source of local jobs.

As regards Plymouth, there's a couple of things to consider. Firstly, Stagecoach ALWAYS put in new vehicles wherever they go into - it's a hearts and minds exercise rather than based on economics. Remember, when they entered Darlington, 10 new vehicles appeared there. In the next 4 years, only another 7 appeared, and none in the last 8 years of its existence.

Secondly, First did put new fleet into Plymouth at various times up until 2005. Of course, from 2007 onwards, First Group failed to adequately invest in new vehicles. Had it not been for "Moir-led stupidity" in picking a fight with council owned PCB, that could've been a decent solid operation but no, UgoBus appeared and then disappeared and the damage was done. Go Ahead could then see the weakness especially post 2012 and went in for the kill. Stagecoach was a different proposition - peace declared and so fleet renewal is actually achievable (though I confess, the Falcon has caught a lot of people by surprise).

First have actually done a lot of fleet renewal and one area I would point you to was South Wales which was absolutely terrible. Now almost recognisable!

Other than your new Aldi's & Lidl's still opening new stores, I think it's fair to say there rest will be closing / selling off more stores than they're opening. I'm not very familiar with the Potteries area either.

The issues still as I see it are the worst performing opco's are still being starved of any investment or at least newer buses, Potteries barely managed to muddle through removing remaining non DDA vehicles.

Stagecoach was always going to use Plymouth as a base to expand Megabus / coaching activities, Falcon is definitely a bold move, good luck to them!

It seems First Worcester profits are also in sharp decline whilst turnover has remained pretty static:

Accounts: To 28th March 2015

Turnover : £10.655 Million (£10.330 Million 2014)
Operating Profit : £485k (£818k 2014)
Pre-tax : £434k (£786k 2014)

One of their new routes last year may have been sacrificed as a result unless there is a new registration to follow:

PD0000480/324 - FIRST MIDLAND RED BUSES LTD T/A FIRST MIDLAND RED, FIRST POTTERIES, DIVIDY ROAD, STOKE-ON-TRENT, ST3 5YY
Cancellation Accepted: Operating between Worcester Bus Station and Halesowen Bus Station given service number 147 effective from 10-Apr-2016.

 

[Robertj21a]

.
If only it was possible to just do an experiment by having Stagecoach take over the First Potteries routes (not vehicles, or staff.......)

It may be that my mind has gone blank but have many/any of First's senior managers worked for Stagecoach in the past ? I can think of some who have been in other parts of First or Arriva, Reading, Transdev etc but can't immediately think of any who came from Stagecoach. Perhaps First Group are simply still not quite there when it comes to getting all the key basics in place.

 

[overthewater]

So why does first not inverts in the portieres area? Midland Bluebird got a new buses, so is there more faith for that area?

Again there is strange believe if there ecomany tanks less take people take the bus, YET when you have 85% employment or college etc its clear the bus is still failing to grab new passengers.

 

[TheGrandWazoo]

So why does first not inverts in the portieres area? Midland Bluebird got a new buses, so is there more faith for that area?

Again there is strange believe if there ecomany tanks less take people take the bus, YET when you have 85% employment or college etc its clear the bus is still failing to grab new passengers.

Why Midland Bluebird got investment.... don't know?

However, clear why Potteries didn't get new fleet! What may happen in 2016, who knows?

As for bus patronage, if you look at the socio-economic classes, the D and the E's (said by some to be sub-prime) are very price conscious. Up the fares and/or reduce pay/state benefits and patronage falls.
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.
If only it was possible to just do an experiment by having Stagecoach take over the First Potteries routes (not vehicles, or staff.......)

It may be that my mind has gone blank but have many/any of First's senior managers worked for Stagecoach in the past ? I can think of some who have been in other parts of First or Arriva, Reading, Transdev etc but can't immediately think of any who came from Stagecoach. Perhaps First Group are simply still not quite there when it comes to getting all the key basics in place.

Ah, you're after a Stagecoach monopoly Only kidding, but they do operate very well.
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Other than your new Aldi's & Lidl's still opening new stores, I think it's fair to say there rest will be closing / selling off more stores than they're opening. I'm not very familiar with the Potteries area either.

The issues still as I see it are the worst performing opco's are still being starved of any investment or at least newer buses, Potteries barely managed to muddle through removing remaining non DDA vehicles.

Stagecoach was always going to use Plymouth as a base to expand Megabus / coaching activities, Falcon is definitely a bold move, good luck to them!

It seems First Worcester profits are also in sharp decline whilst turnover has remained pretty static:

Accounts: To 28th March 2015

Turnover : £10.655 Million (£10.330 Million 2014)
Operating Profit : £485k (£818k 2014)
Pre-tax : £434k (£786k 2014)

One of their new routes last year may have been sacrificed as a result unless there is a new registration to follow:

PD0000480/324 - FIRST MIDLAND RED BUSES LTD T/A FIRST MIDLAND RED, FIRST POTTERIES, DIVIDY ROAD, STOKE-ON-TRENT, ST3 5YY
Cancellation Accepted: Operating between Worcester Bus Station and Halesowen Bus Station given service number 147 effective from 10-Apr-2016.

The curious thing is.... Not much had happened at FMR in that time? During 2014, no closures (Kiddie or Redditch went in 2013?, Hereford in mid 2015) and not much in new services or even new vehicle investment save for a few Streetlites.

 

[overthewater]

Why Midland Bluebird got investment.... don't know?

However, clear why Potteries didn't get new fleet! What may happen in 2016, who knows?

If we can get answer to that question I do believe we might fully understand the over picture with operations in Stoke. Does Aberdeen have more faith in Falkirk and Stirling or even the Scottish borders?

As for bus patronage, if you look at the socio-economic classes, the D and the E's (said by some to be sub-prime) are very price conscious. Up the fares and/or reduce pay/state benefits and patronage falls.

Your just proven my point, clearly in this part of UK, First has failed to expand their customer base. Its clear Stagecoach East Scotland, West Scotland, Cambridge, along with Transdev in Harrogate and Lancashire, have managed to get the C1/2 and B on their buses.

Of course for nearly the whole day its been going back and forth between people about the reasons behide it, but move forward its will need to think outside the box.

 

[TheGrandWazoo]

If we can get answer to that question I do believe we might fully understand the over picture with operations in Stoke. Does Aberdeen have more faith in Falkirk and Stirling or even the Scottish borders?




Your just proven my point, clearly in this part of UK, First has failed to expand their customer base. Its clear Stagecoach East Scotland, West Scotland, Cambridge, along with Transdev in Harrogate and Lancashire, have managed to get the C1/2 and B on their buses.

Of course for nearly the whole day its been going back and forth between people about the reasons behide it, but move forward its will need to think outside the box.

You'll have to ask a First person about the rationale of investment....

As for the socio-economic B's, I still doubt that's quite where the bus industry is yet except for a few very select examples. I might point out the same issue is prevalent in Redcar and Cleveland.

Stagecoach manage to protect those lower groups simply because they hammer down on cost continuously. They are very good at that but just before we laud them about how they appeal to the great washed remember, what is Gold standard on a new Stagecoach bus is actually just standard on a new First bus.

However, there's still a lot to do to turn this around. I never thought it would be done in two/three years

 

[winston270twm]

The curious thing is.... Not much had happened at FMR in that time? During 2014, no closures (Kiddie or Redditch went in 2013?, Hereford in mid 2015) and not much in new services or even new vehicle investment save for a few Streetlites.

The only thing that springs to mind that happened during that period were the Worcestershire County Council tendered bus service cuts as per LAC currently. But I don't remember First being as affected as some, as alot of the Worcester services were commercial. Wasn't that also the time that First took on those extra contracts for Hereford to Monmouth etc? May be they bid low to win them

 

[overthewater]

You'll have to ask a First person about the rationale of investment....

As for the socio-economic B's, I still doubt that's quite where the bus industry is yet except for a few very select examples. I might point out the same issue is prevalent in Redcar and Cleveland.

Stagecoach manage to protect those lower groups simply because they hammer down on cost continuously. They are very good at that but just before we laud them about how they appeal to the great washed remember, what is Gold standard on a new Stagecoach bus is actually just standard on a new First bus.

I know alot of people who dislikes the leather seats. If you keep a standard bus in good condition, alot people will happy with said bus.

However, there's still a lot to do to turn this around. I never thought it would be done in two/three years

To be fair were only really looking at few places within UK Bus, with everything else not really needed much work.

 

[Robertj21a]

Just as a reminder, here is 'Route One' interviewing Giles a year ago:-

.....................
A platform for growth: Interview with Giles Fearnley 0

BY MEL HOLLEY ON JANUARY 8, 2015 OPERATIONS

Having spent the last two years rehabilitating First UK Bus, MD Giles Fearnley believes that the business is now on a solid footing ready for growth. This hasn’t happened by accident, but as part of a clear plan. But, as he explains to Mel Holley, there is much still to do to improve.

When is a job ever complete? In transport, probably never. But, having taken the helm as MD of First UK Bus three years ago, Giles Fearnley is confident that the structural changes implemented as part of its business transformation strategy have positioned it ready for growth.

In short, it’s seen a revised management structure, with local managers having sensibly-sized geographical areas. This has seen devolution of decision-making to a local level, whereas previously virtually all business decisions were made at Aberdeen with instructions to be implemented locally.

The brand itself has been refreshed. No pretentious slogans, but the return of local identities in keeping with areas.

Underneath the skin has been its ‘Better journeys for life’ campaign, and change-management at depots, to put the focus on passengers; with everything from cleanliness, punctuality and reliability tackled, to how staff engage with each other and how problems are solved.

Steaming ahead

It’s been a massive task, and while the first phase has been completed it is, admits Giles, a process that will continue. While the business transformation is now tapering in emphasis, it will not stop.

“We are clearly now a super-tanker steaming in the right direction,” he says. “I’m measuring that by the external signs which are improved.

“So it’s performance – although that can get better – but we are now able to hold it consistently. That’s important because you can improve too rapidly and then fall back. This is sustainable stuff.

“And we’ve got volume growth of the all-important fare-payers. That’s the first time the business has seen organic growth for an awfully long time.

“And this is the truly good bit – we’ve got the external markers of the Passenger Focus survey, which took place a year ago. We do our own monthly survey of our networks, which gives tracking data, and that is indicating to us that broad satisfaction is continuing to go the right way.”

That’s important, because it is reflected in increasing numbers of passengers: “And that’s despite some pretty tough economic conditions in some of the towns and cities that we serve.” Given that First’s major mileage is in the north of England and south Wales, which are still struggling to recover from the recession, it’s no mean achievement.

In some markets, work to stimulate growth, such as fare reductions, has had an effect. “It’s coming through in spades in Bristol,” says Giles, “which gives us great optimism for the future.”

Observers might note that Go-Ahead has largely flat growth (dragged down by the harsh economic conditions in Tyne and Wear) while Stagecoach’s growth is less than 2%. It’s also fair to say that First had some catching up to do, but it does seem to be bucking a general trend.

“There’s no question that after years of passenger decline – a lot of it brought on by unacceptable service quality, reduced frequencies and higher-than-inflation fares – we have bucked that and have a great opportunity to pull it back, and we are doing that.”

IT progress

Less visually arresting than the buses, but “hugely important,” is the work on IT – particularly customer-facing technology. “We have made huge strides from where we were,” says Giles. “We were first with Barclays Pingit, and our apps have won awards, stuff we never dreamt of two years ago.

“We won’t stop this work. We’re learning so much more about what our customers want and their travel habits. We’ve gone from having no data to having a lot, and you have to learn how to use it skilfully.”

Other work has included network reviews to “repair damage” to mileage and frequency – along with longer operating hours, plus the fare reviews and work to repair “reputational damage.” It aims to be the partner of choice for local authorities and others.

While the work on fare reviews is now complete, as mobile ticketing uptake grows, there is the opportunity to provide bespoke discounting in a way that wasn’t possible before. The value-for-money scores have “shot up.”

With fare reductions, the response – in terms of passenger growth – has varied from area to area. “Now we’re getting better, we’re able to be bolder and more confident about our messages.”

At some point fares will go up – but “unless there are exceptional circumstances, that won’t be more than annually, and we’d expect it to reflect inflation and the changing cost structure,” says Giles. “It’s got to be linked to reasonableness and maintain the volume trend – we don’t want to damage the volume trend.”

Overall, First is enjoying around 3% year-on-year passenger volume growth. It’s been hard won, and it’s clear that these gains are not going to be squandered by short-term measures.

First is also seeing a “very noticeable shift” in the Manchester and Sheffield markets – both of which have seen substantial fare cuts – with people moving from singles to days, days to weeklies, and weeklies to monthlies.

“These are the most mature markets as they were the earliest to have fare changes, and we’re still seeing volume growth in those markets,” says Giles.

“But now we are seeing people who are investing in longer-term products – and that’s great because we’re seeing the results of the business model coming through.”

This is important, “because we need a growing volume base to justify the investment, which is a circular argument. Also a sub-text is to instil customer loyalty.”

Targets

The financial target is clear – that First UK Bus will achieve a double-digit profit margin. “It’s what we need, to continue to invest in the way we want to.” The current margin is around 5.5%.

While announcements have not been made, it’s expected that 2015/16 new bus orders will be similar to the previous years. “Real-term commercial revenue growth will come through sustained volume growth.

“Since we started this work we have seen our commercial revenue growth lagging behind the volume growth.

“You’d expect that because we really took a very sharp knife to some of our fares, such as day tickets in Sheffield and Manchester, plus the work we did in Bristol.

“That was deliberate to increase the size of the customer base. As we head towards anniversary dates (for season ticket renewals), we are seeing those two growth lines coming together.

“We know that there is more potential, so that revenue will continue to grow.”

It’s not easy to compare profit margins between the big groups as some aspects, such as overheads, are treated differently, but also pensions.

First was “very much late to the party” in closing its defined benefits pension scheme to new entrants, “so we have a much greater proportion of payroll to pension-cost than Go-Ahead or Stagecoach.”

On the cost side, the changes haven’t been about cutting, but improving efficiencies, particularly on overheads, IT systems, and fuel – thanks to new vehicles with better mpg, such as Wrightbus’ StreetLites.

“A few years ago our new buses had poorer fuel consumption than older ones we were replacing,” says Giles. “But now we’ve turned that corner and that’s very, very valuable.”

Economy

The bus industry holds a mirror up to the local economy, and growth is not always easy where local economic activity is poor. First sees that in its operations. “In some locations, such as Glasgow, it’s very difficult,” admits Giles. “If you look at the economic statistics behind Glasgow, they are quite frightening. The Commonwealth Games gave it a short-term boost.”

The Glasgow Simplicity network and work on fares is designed to not only help First, but also “breathe life into the local economy,” recognising the part that public transport plays.

Leeds and Manchester, he adds, have seen “extraordinary growth in the centres, but the periphery towns are completely different cases, such as Oldham, Rochdale and Stockport.”

Despite this, every part of the business is being touched by investment, even those that haven’t seen a new bus for years, such as East Scotland, Portsmouth and Weymouth.

Other ways of increasing growth have included partnership, such as in Sheffield – the clearest example of partnership working – where all actions are aligned to a common agenda. In South Hampshire the partnership is not as “deeply defined” but is long-running and deeply embedded. “We are now trying to find a way forward with Hampshire County Council on how to fund extending Eclipse on the Gosport peninsular.”

The relatively low-key launch of the multi-operator Solent smartcard has been a success, and heralds similar roll-outs across the rest of the country. “There’s been no real trumpets blown on this; it’s been a soft-launch, but it’s a lesson in smartcard development and introduction.”

Places such as Eastern Counties where the “business was very tired” are also responding to treatment following new buses, and partnership working, with growth starting to come.

Respect

Has the brand of First been detoxified? “I’d like to think so, but we mustn’t be complacent, and people have long memories,” says Giles. “An issue for us is that politicians have even longer memories, but I think we’ve come a long way, and demonstrated through our consistent actions that we do what we say: That we are really determined to work with our local authority partners, to understand their needs, to make commitments and see them though consistently.

“A huge step forward in terms of relationships locally has been a return to the local management style. They have someone with authority they can talk to, rather than someone they saw as more of a ‘postman’ delivering messages.

“We have to accept there are people out there who used to be our passengers, and we caused them to no longer to travel with us. We haven’t necessarily cleansed the brand in their eyes yet, and that’s a harder task. But we hope that by word of mouth, and by what they see on the street, they see that this is different.”

There is no doubt that Giles – already a very able and experienced figure – has a strong grip not only of the detail of what is happening all around First UK Bus’ operations, but that he understands clearly the different regional dynamics and needs.

Steady progress, with the model being adapted to fit local needs – such as the launch of the Buses of Somerset, with its distinctive brand and livery – demonstrates that flexibility is the key.

He is under no doubt that partnerships that work are the key to unlocking further opportunities for sustainable growth, and in turn the long-term future of a thriving and profitable business – whose aspiration is to re-invest large sums and play a full and committed part in the local economy.
.

 

[Baxenden Bank]

I thought the old one was done by an outside consultancy (TAS??) but that the recent one was done in-house?

Where incomes are low, patronage is more susceptible to price sensitivity. Also, you are seeing in places the appearance of local foodstores (often of a German persuasion) which also depresses travel.

My understanding, from reliable sources, was that a man, formerly based in a bus garage on the Isle of Wight, was responsible. The same person also being responsible for the Staffs CC area reviews carried out around the same time.

As to who determined the scope of any review, and made the final decisions on implementation, that must fall somewhere within First, be it local, regional or Aberdeen.

 

[robertclark125]

When you look at the way First has topsy turvied in some areas, people are comparing things to Stagecoach, and even the Go Ahead Group. Stagecoach does reasonably well in rural and semi rural areas, as it started off as a long distance coach operator, and in the mid 1980s bought a rural bus operator, Mclennans of Spittalfield. In the NBC bidding, it bought Ribble, Hampshire Bus, and United Counties, all of which were semi rural and interurban operators. Same with Fife and Bluebird in the SBG sell off. Save for the purchase and subsequent ordered sale of Portsmouth, it never went into urban networks until it bought GCT in Grimsby in 1993. Even now, that's absorbed into another Stagecoach inter urban operation, Lincolnshire.

The Go Ahead group started off slightly differently, with Go Ahead Northern, which was an urban and interurban operator combined, through a vast network in Tyne and Wear, and rural operations in northern County Durham. It also ran express services, some as far as Peterlee and even Middlesbrough in the past. It used that inter urban mix to its advantage when it bought the likes of Wilts and Dorset, Oxford, Brighton, and the recent acquisitions in east Anglia.

Nevertheless, both started off with experience of running long distance and rural operations. When you consider Badgerline started off that way, with the only urban operation it had being in Bath, you'd have thought that the experience of running Western National would've helped with areas like the Potteries, and even when you consider GRT actually owned Midland Bluebird, SMT, and Lowland, the latter a very rural operation, it's amazing that it couldn't get the mix right. Then again, GRT was a citybus operator, but owned Midland Bluebird for a few years before expanding more.

So given the fact GRT initially bought Northampton, isn't it amazing that an urban operation went? As Ive already said, in most cases, the parts of Firstgroup that weren't doing well were the ex GRT bits. Livingston, Lowland, Midland Bluebird, Northampton, and bits of United counties.

The only ex Badgerline bits not doing well were Western National, and Potteries. The former has turned a corner for the better, and other ex Badgerline bits are steadily improving; Bristol, south wales, and I'm told parts of Essex.

Makes you wonder what would've happened if Badgerline and GRT had never merged?