First Group: General Discussion

[overthewater]

Do we expect some hefty fare rises coming through? After all train fares have increased a bit more than usual.

Why would accounts from 8 months ago determine the if fare raise will happen now?

 

[Robertj21a]

FEC is in (see attached)

Pension fund impacting here again.

Wow ! - doing reasonably well, but then hit with £4m for pension funding.

 

[Robertj21a]

Still waiting for at least Cymru, Bristol, Essex, West of England

 

[F Great Eastern]

What exactly is this massive pension hit over many operating companies coming from?

A deficit that can no longer be put off?

 

[Robertj21a]

What exactly is this massive pension hit over many operating companies coming from?

A deficit that can no longer be put off?

I'm not sure it's terribly clear, but there's some references to Actuarial valuations being carried out at least every 3 years, and the last one was at 5th April 2016. Inevitably, any significant reassessment would need to be taken into account asap - and the Accounts we are now discussing are for that year (to March 2017). Presumably the previous valuations must have become significantly out of line ?

 

[Surreyman]

I am a bit out of touch/out of date but First used to have one of the worst pension deficits in the UK (Cue the old joke about a huge pension fund that also runs a transportation business as well).
Would seem from the individual accounts published that many subsidiaries are pumping money into the DB pension fund, this may well be a sensible and prudent thing to do.
The accounts give the impression that the DB fund is still active to existing members, the accounts mention a DC pension scheme, presumably for new starters?
Can anyone provide more details?

 

[overthewater]

If, and it's a big IF, First have the patience, and yes, can do a bit for the resources - there is perhaps some hope on the horizon. The MD (a former Essex man if I'm right) now in charge at Eastern Counties, has taken over (I believe, after the last of the ex First London exiles left). I believe, maybe more in hope than expectation, he understands the network (being Commercial Manager when the spinal 100, 70 and X30 routes were created), and there are signs appearing of it - the axing of the 72 and 41 for a start (though the 72 might be starting to perform so it depends on other changes too), and there is a cheap makeover for the 100 (those darned Volvo hybrids still give one of the most uncomfortable rides I've ever had, though) - which worked in Norwich, as well as tailoring the X services to meet the demand - something he may have done with the nearest equivalent the X1 at Eastern Counties. They claim to be in listening mode - to both passengers and the drivers. We'll see. Other people on here have told me what difference a good MD with practical experience might make - so I remain to be convinced!
And, yes, I do actually think they have the basis of a good network - if they can stop ruining it by their own actions.

Wasn't the 72 revised to partly replace the 132? which disappear after the braintree depot/sub depot closed down? I still think its bonkers there thought there could have 15min service on that corridor, Especially with all the trains stopping in the town. Maybe it should have went via Maldon Road instead of the leisure centre. It hasn't helped there let in Stephensons in the back door and there cover many of the old links.

 

[Dai Corner]

In case anyone was wondering, a Defined Benefit (DB) pension fund promises a certain pension in terms of salary and length of service. Employees pay a certain percentage of salary (or sometimes nothing at all) and the employer pays the rest. If there isn't enough money in the collective pot the scheme is said to be in defecit and the employer has to pay extra to put this right. The risk lies with the employer.

In a Defined Contribution scheme the employee and employer each pay in a percentage of salary and the employee gets whatever pension that buys when he retires. The risk lies with the employee.

 

[Cesarcollie]

Wow ! - doing reasonably well, but then hit with £4m for pension funding.

Not entirely sure I'd class £221,000 profit on a turnover of £35m as 'doing reasonably well'. Buys about one decker with some small change for a ticket machine!!

 

[Robertj21a]

Not entirely sure I'd class £221,000 profit on a turnover of £35m as 'doing reasonably well'. Buys about one decker with some small change for a ticket machine!!

Very true, but this is First Group we are talking about !

In fairness to FEC, their sales increased by 2.2% due to greater passenger numbers (loss of some competition ?), so at least that's something a bit more positive than some of the gloom in other units.

 

[Cesarcollie]

Very true, but this is First Group we are talking about !

In fairness to FEC, their sales increased by 2.2% due to greater passenger numbers (loss of some competition ?), so at least that's something a bit more positive than some of the gloom in other units.

Yes - you are right. I nearly added something along those lines to my comment!! In fact by First standards FEC is almost a star performer!!

 

[Dentonian]

Why would accounts from 8 months ago determine the if fare raise will happen now?

Agreed, there is very little link between fares and performance. Stagecoach Manchester have always made far bigger profits than First Manchester, but both have consistently put up fares above inflation throughout their history. Apart from general costs, market conditions are the main determining factor. Where there is like for like competition, fares may reduce, but where there is a captive market (ie. no competing bus operator and less ability for customers to switch to private modes), fares will always increase dramatically.

 

[Robertj21a]

In case anyone was wondering, a Defined Benefit (DB) pension fund promises a certain pension in terms of salary and length of service. Employees pay a certain percentage of salary (or sometimes nothing at all) and the employer pays the rest. If there isn't enough money in the collective pot the scheme is said to be in defecit and the employer has to pay extra to put this right. The risk lies with the employer.

In a Defined Contribution scheme the employee and employer each pay in a percentage of salary and the employee gets whatever pension that buys when he retires. The risk lies with the employee.

First Group has a Defined Benefit scheme for UK Bus. Is this normal amongst bus companies ?

 

[TheGrandWazoo]

First Group has a Defined Benefit scheme for UK Bus. Is this normal amongst bus companies ?

Depends on what they inherited, whether they have stopped it, moved to a DC scheme etc?

First has one of the largest variances of pensions liability vs. group capitalisation on the stock exchange. However, this is skewed by the rail operations (that they pay into the central DPS scheme so it's not a true liability) but they may have taken the decision to pay in.

 

[Dentonian]

Depends on what they inherited, whether they have stopped it, moved to a DC scheme etc?

First has one of the largest variances of pensions liability vs. group capitalisation on the stock exchange. However, this is skewed by the rail operations (that they pay into the central DPS scheme so it's not a true liability) but they may have taken the decision to pay in.

FWIW, because I know a lot of right-wing tosh is talked about public sector pensions; Public sector (certainly LAs) have DCs, so the employee pays in (normally c. 6%) and all the recent changes to increase access to lump sums before retirement do NOT apply to public sector employees.

 

[Dai Corner]

FWIW, because I know a lot of right-wing tosh is talked about public sector pensions; Public sector (certainly LAs) have DCs, so the employee pays in (normally c. 6%) and all the recent changes to increase access to lump sums before retirement do NOT apply to public sector employees.

No, I am a member of the Local Government Pension Scheme and it's defined benefit.

I'm not sure of the exact reasoning behind disallowing access to lump sums but it's almost always a very bad idea if you're in a DB scheme.

This is way off topic for the buses forum so if anyone wants to discuss it further I suggest starting a new thread in the appropriate forum.

 

[TheGrandWazoo]

FWIW, because I know a lot of right-wing tosh is talked about public sector pensions; Public sector (certainly LAs) have DCs, so the employee pays in (normally c. 6%) and all the recent changes to increase access to lump sums before retirement do NOT apply to public sector employees.

I don't know what the relevance of this is.....

I know that in my industry, I started in a final salary (DB) scheme in the mid 1990s. The scheme was closed to new entrants in the early 2000s and then closed to existing members about 6 years ago, in preference to a money purchase (DC) scheme.

The exact contributions of a DC scheme (company and individual) vary from firm to firm, scheme to scheme, as do any other terms like the ability to increase the individual contributions (AVCs).

 

[Robertj21a]

No, I am a member of the Local Government Pension Scheme and it's defined benefit.

I'm not sure of the exact reasoning behind disallowing access to lump sums but it's almost always a very bad idea if you're in a DB scheme.

This is way off topic for the buses forum so if anyone wants to discuss it further I suggest starting a new thread in the appropriate forum.

Agreed, the detail is not appropriate to this thread. All that is particularly relevant is that various First Group subsidiaries in UK Bus are having to contribute significant amounts (£m's) towards correcting the position - naturally, that will make their Operating Profits even worse than may have been expected.

 

[DragonEast]

I'm pleased to see Eastern Counties doing comparatively well. The pension fund situation is outside their control, though I suspect First have made it messier than it needs to be, as they so often seem to do by being behind the game. I don't know if the fact that a few years ago Eastern Counties were one of the biggest shrinkers has any effect, if perhaps frozen DB pensions, are now coming into payment.

The impression I have is that they have a network which meets customer needs, with a good concentration on the commercial routes serving the University, hospital and the X1. And increasingly they "look good" and give the impression of being cared for. I always recall the overheard comment of a customer a few years ago "if they don't care for their buses why should I care about them?" It matters. As a result it's getting some modest expansion into areas they withdrew from years ago in favour of Anglian (Beccles/Southwold). The way they dealt with the Anglian "threat" was exemplary. (Perhaps look out for some similar stuff in Essex,who are it seems adding routes in Go Ahead's Clacton home base. I don't think of the East Coast as good bus territory but needs must! Go Ahead in turn are sniffing around the future housing growth areas served by First so that is presumably an incentive to deal with them early!) And the indications are that the Ipswich Park and Ride that Eastern Counties took on in July is performing better than under the Ipswich Bus former stewardship. It all smacks of a Company that has got its act together across the board in route planning and strategy, performance, engineering and customer service. Perhaps a rare achievement for First?

Essex 71/2 is interesting. Purely in terms of network performance I might have considered cutting back the 71 (Chelmsford/Colchester, a link also provided by their 70) to peaks (and perhaps hourly daytimes) since the A12 living nightmare is one of the biggest threats to service reliability across the mid-Essex network because of the knock-on effects with buses and drivers being out-of-place! The 72 could then run a reduced off-peak service only (when it meets local "social" needs), with a truncated daytime 71 running during the gaps in the northern section as they run during the evenings; and still achieve the same PVR/mileage reduction. (And whilst they're at it think about an emergency timetable which can operate when the A12 is shut, which happens more often that it ought to). It's that sort of "bringing it all together" thinking that Eastern Counties seem to be getting the hang of, rather than just the classic black-and-white First Stop-Go, cut or (even more rarely) expand. I still find First Essex puzzling, perhaps best summed up by how the subsidised routes that worked like clockwork under former operators get constant tinkering once in the hands of First(Essex)! What are they playing at?

 

[DragonEast]

Oops duplicate post in error

 

[Jordan Adam]

Part of the issue i think First Aberdeen has had is the launch of a high frequency route which has been very slow to pick up passengers. Along with the loss making 5 which was withdrawn in August and the slow pick up of the 8/9.

In it's first year the 8/9 rarely got a handful of passengers. But since around August passengers have started to use it instead of the slower very busy services 1/2 and 19, Now most run between City Centre and Dubford with at least 20 people. the issue is the other side of the route. City Centre to ARI (Aberdeen Royal Infirmary) gets about 6 people per bus while ARI to Heathyfold is lucky if it gets more than 2 people. We can be pretty sure that in the next changes the ARI - Heathryfold section will be withdrawn, but I think if they cut the service to operate Dubford to ARI and changed the route between Citycentre and ARI it would benefit massively.

The 16 was very slow to pick up and is still somewhat struggling while i think a decrease in frequency would help massively i don't see how that would work as it's meant to work with the 17 to create a 7/8 minute frequency and cutting the 17 is a big NO! While at peaks the service can quite easily get a standing load off peak it varies depending on how early/late the 17 in front is running. I'd say it averages about 6/7 people outbound and 12 - 15 in bound. In terms of the 16 i'm unsure on what they can do as they've tried quite a bit. High Frequency? Yes (Every 15 minutes), Advertising? Yes (Nearly every bus stop on route had an advert for the first few months of it's launch), Route branding? Yes (The 16 was in-cooperated in to the Northern Lights and all buses got new branding fitted including the 16), Good fares? Yes (A special £1.50 return fare is offered between the City Centre and Dyce P&R, This is very very cheap considering it's the same as a 1/2 stage single ticket and the journey is quite a distance. While the P&R day ticket at £3.50 is also offered on the 16 and X40. For comparison a Stagecoach single on the 37 from/to the same locations is £3.20). I think if they withdrew the pointless Airport section of the 16 or changed the route so it no longer serves Dyce Drive outbound it would boost numbers as this has been the biggest complaint from Passengers is that it wastes time going round the Airport outbound instead of going direct like it does inbound, And maybe if they gave the route unique branding that really stands out and advertising the route for what it is (It has lots of missed potential) then that would help as the current branding shows where it goes but the 16 doesn't stand out much.

On the other side of things the routes 12, 13, 18, 23 & X40 all appear to be far busier this past year than they previously were. While the 1/2, 3/3G, 11, 17 & 19 all remain very well used. The little used 27 was replaced with the now well used 117.

The August changes which were designed to make the PVR lower without massively affecting frequencies (Only the 19 saw a minor frequency cut) have also affected reliability. The biggest mistake was extending the 8/9 without increasing the PVR, this has made the route havoc for drivers who have 1 hour to go from end to end (Which is impossible), to try and combat reliability issues the service now inter works at Dubford with the X40 getting a decent enough layover. But this is still not enough (I've seen buses some days running up to 40 minutes late).

I should mention though Stagecoach here are struggling just as bad if not worse and have made a number of even larger cuts to services including totally withdrawing frequent routes in favour of routes that operate less than 10 times per day. Take what i've said here as you want but this is how i see things from my perspective as a regular user of the services in Aberdeen, who has some idea of how it all works.

 

[Blackpudding]

Part of the issue i think First Aberdeen has had is the launch of a high frequency route which has been very slow to pick up passengers. Along with the loss making 5 which was withdrawn in August and the slow pick up of the 8/9.

Not on topic with your post but would I be right in thinking that he coaches element is being run down?

 

[overthewater]

I should mention though Stagecoach here are struggling just as bad if not worse and have made a number of even larger cuts to services including totally withdrawing frequent routes in favour of routes that operate less than 10 times per day. Take what i've said here as you want but this is how i see things from my perspective as a regular user of the services in Aberdeen, who has some idea of how it all works.

Take those changes with salt. The guy now running the show like to take butcher knife to the network and goes to far.... become a joke now..

 

[F Great Eastern]

Not on topic with your post but would I be right in thinking that he coaches element is being run down?

Two 2006 Caetano Levante vehicles from First Aircoach (First Cymru before that) transferred to Aberdeen late last year from Dublin but haven't been repainted or re-registered as of last month.

There are a further two still with Aircoach used as reserve vehicles which most likely will go to Aberdeen once new Plaxton vehicles due later this month are delivered.

 

[Blackpudding]

Two 2006 Caetano Levante vehicles from First Aircoach (First Cymru before that) transferred to Aberdeen late last year from Dublin but haven't been repainted or re-registered as of last month.

There are a further two still with Aircoach used as reserve vehicles which most likely will go to Aberdeen once new Plaxton vehicles due later this month are delivered.

I wish there was a 'thankyou' button. I asked the question because I wondered whether these would see service or not. My perception is 'not'. I think and can understand why when capital is short that apart from Reading and Ireland First would be bonkers to invest in coaches.

 

[Jordan Adam]

To answer your questions, the coach hire side was meant to be scaling down it's fleet to only operate School Contracts but i'm yet to see any changes to the way it was operated this time last year. The 2 Levantes are still sat at the rear of King Street Depot and have are still yet to be touched, It was believed they were going to head to Glasgow for repaint late last year but clearly this has not happened. All 3 B12Ms left the fleet last month after being replaced by 3 B7Rs from First Scotland East but one of these has already returned back.

Take those changes with salt. The guy now running the show like to take butcher knife to the network and goes to far.... become a joke now..

As for Stagecoach North Scotlands "New" commercial director who moved from First Aberdeen at the end of 2017. I somewhat agree with you but it takes more than one person for a changes to happen. What i will say is some of their changes are quite questionable. Although in their defense many of the cuts Stagecoach NScot have made were back in May long before they joined.

 

[F Great Eastern]

I wish there was a 'thankyou' button. I asked the question because I wondered whether these would see service or not. My perception is 'not'. I think and can understand why when capital is short that apart from Reading and Ireland First would be bonkers to invest in coaches.

Bit about these coaches from a contact in Ireland (see quote)

In mid 2012 Aircoach had over 40 leased coaches without toilets and two with when they launched Dublin-Cork non-stop to replace stopping service which had a break for driver regulations and toilet break. When they launched the new route reduction in journey time meant a stop was not necessary led to 50% of passengers being annoyed if they didn't as couldn't use the toilet and other 50% annoyed because a 'non-stop' bus was making a stop if they did.

Most of those toilet-less vehicles had almost 2 years left on lease and it would be stupid to lease more and add costs whilst another 8 leased were parked up. So the 4 Levantes and ex Cymru Panthers and creative use of demonstrators were a medium term fix. Since they were owned by First, they didn't add extra costs. So spent18 months on that route, until a number of 2004 Setras could be returned off lease - resulting in 10x Panther 3s replacing everything else.

Following this in early 2014, the Levantes were switched to the 702/703 suburban Airport routes for a two years which allowed 3x 2004 Scania Centuries to be auctioned off and two of them ended up going to Edwards in Wales and the other one to a local operator in Ireland.

6 more Panthers were delivered mid 2016 - Levante's became reserve vehicles and in Jan 2017 they were withdrawn when another 4 vehicles arrived. Then in the middle of 2017 the Cork timetable increased which saw two 2016 Panthers switch to that route and saw two of the Levantes be restored to back-up duties and the other two left for Scotland.

They were generally not liked in Dublin and were only ever a free stop-gap solution to the issue my contact outlined above. They were seen as uncomfortable, unreliable, brittle and a pain in the ass to maintain in the depot and maybe that is why they're in no hurry to put them in service.

There'a also a 2005 Setra which may get withdrawn from Aircoach this month - I can't see that coming to Aberdeen though - probably not viable to transfer one coach over to Scotland of a brand that has never been maintained outside Dublin.

The rest of the fleet (32x Panther, 19x Jonckheere) is leased so don't see you getting any coaches from them

 

[Blackpudding]

Bit about these coaches from a contact in Ireland (see quote)



They were generally not liked in Dublin and were only ever a free stop-gap solution to the issue my contact outlined above. They were seen as uncomfortable, unreliable and a pain in the ass to maintain in the depot.

Eat your heart out then National Express! I'm not going to argue against your contacts view but it's similar to the First Bolton situation where they seem to have taken a dislike to the Scania artics transferred from Bury. Engineers never could agree what was suitable in my experience.

 

[F Great Eastern]

Eat your heart out then National Express! I'm not going to argue against your contacts view but it's similar to the First Bolton situation where they seem to have taken a dislike to the Scania artics transferred from Bury. Engineers never could agree what was suitable in my experience.

I heard the same from staff when I have been in Ireland and if you look on enthusiast forums in Ireland there is no love for them at all - there have been various jokes about what people would like to do to them!

One thing I will say is that this is the older version of the Levante before it was face-lifted inside a few years later, the newer version is better but still don't rate the Levante as a coach.

As you say, to bring this back on topic, I don't see any benefit in investing in new coaches for operations outside of Railair and Aircoach, I'd have suggested more for the X30 in Essex but we all know how that ended up.

 

[Blackpudding]

I heard the same from staff when I have been in Ireland and if you look on enthusiast forums in Ireland there is no love for them at all - there have been various jokes about what people would like to do to them!

One thing I will say is that this is the older version of the Levante before it was face-lifted inside a few years later, the newer version is better but still don't rate the Levante as a coach.

As you say though to bring this back on topic, I don't see any benefit in investing in new coaches for operations outside of Railair and Aircoach, I'd have suggested more for the X30 though in Essex but we all know how that ended up.

It's good to know that engineers are the same the world over. If I had a £ for every time and engineer had told me what a rubbish state another depots HGV vehicle was in I could have retired much, much earlier than I did. The issue though is, as you say, short termism with the interior spec rather than the chassis spec coming up short

On the X30 theme and bearing in mind the coaches transferred to Kernow appear not to have been used I wonder what is stopping them bringing them back even it is only a short term solution!