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Little Gem buses has ceased operating

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GusB

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Given that in order to bid for a franchise, TfGM are reportedly looking for a "deposit" of £20M from EACH operator in advance, it's no wonder Little Gem see no future in the local bus services.
If you are claiming that Transport for Greater Manchester is looking for a £20m deposit, there must be some document in the public domain that backs this claim up.

Could you post the link to this document and quote the relevant part, please?
 
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RailUK Forums

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Interestingly, LJ09KPF has seemingly been repainted in Diamond livery
Also drivers have been offered jobs at Diamond's Eccles depot. The letter of which being shared in a public Facebook group.
Firstly, we would like to apologise to all our staff that it has come to this.

Unfortunately, Little Gem Bus Company has come to an end. This is due to the ever-rising fuel costs, the number of accidents we have had, the amount the insurance company want us to pay, and TFGM being constantly on our case, demanding more and more from us, and issuing ridiculous fines and deductions.

We have continuously tried our very best to keep the company afloat, through selling what we can and cash injections from where we can but have sadly come to the end of the road and are having to close our doors on Saturday 22 April 2023.

Everyone will be paid in full on Saturday for work done this month and please be assured all pension are up to date and April's will be paid as usual.

Wesley has secured drivers positions for all staff at Diamond Bus Eccles and there will be a representative on site this morning from Rotala to discuss your new position with them should you wish to accept.

Myself, Wesley, and Louis would like to take this opportunity to thank you all for your hard work but I'm sure you understand we can't carry on any further.

We wish you all the luck for the future.

Kindest Regards

Sally Goodwin
 

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Bletchleyite

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Great that they've sorted their staff replacement jobs, that's certainly something, but the rest of it sounds like the typical moan of an operator who just doesn't want to comply with requirements surrounding quality and due process, and thus one that we're probably better, as I said above, without.

Though if they've had a high accident rate it would be interesting to know why, e.g. are timetables unrealistic so drivers have to "rag round", and who set them?
 

Shauny

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I wonder if D&G will go for the 288's? As they used to run them for a few years. D&G have just took on a load of new routes commercialy & on a tender.
 

M803UYA

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Great that they've sorted their staff replacement jobs, that's certainly something, but the rest of it sounds like the typical moan of an operator who just doesn't want to comply with requirements surrounding quality and due process, and thus one that we're probably better, as I said above, without.

Though if they've had a high accident rate it would be interesting to know why, e.g. are timetables unrealistic so drivers have to "rag round", and who set them?
Transport for Greater Manchester (TfGM) have a fairly rigorous contract management system in place for their bus service work. It's possible for an operator not complying with the terms of the contract to find that they're paying TfGM to run the tendered routes after the penalties for non compliance are issued. If there are multiple violations, that could outstrip the payment for operating the contracts. This could be customer complaints, observations from TfGM supervisory staff in bus stations, failing to show a destination, failing to operate a journey, operating a journey later than timetabled, using an non compliant vehicle (age of vehicle, or the capacity/size of vehicle)on a journey, general condition of the vehicle. I've even heard of penalties issued for a failure to respond to requests for information from the authority in the required timeframe.

TfGM sets the timetables on it's tendered services and has people in their very large office block whose job it is is to devise the timetables. That said, the operator has the responsibility of complying with their service registration. I guess an operator has the choice of not accepting the contract if they can't compliantly run the service. There are penalties for early termination of TfGM contracts - Goodwins might be liable for the variation in the higher contract price of any replacement operator. So the action they've taken is pretty final and evidently they're not seeking to work for TfGM in any capacity again.

Add into the mix a reputation amongst driving staff as an operator not worth going to - the staff I read on another forum were on monthly pay. Are those staff being paid correctly for the hours they've worked? If they find that someone has missed hours off their paycheque that would prompt staff to leave for better more reliable paid work elsewhere. Do those staff have to clean the buses at the end of their shift, or does the firm employ cleaning staff? If their choice of the driver pool is diminished they'll find the people they can employ might have been dismissed from other employers before they've come to Goodwins and may well have a poor accident record. This will increase your insurance premium or the insurer will impose a higher excess on a specific driver who has been involved in multiple accidents.

Goodwins will be aware of the requirements of TfGM for their contracted bus routes as they're not exactly new to this side of operation. It's clear from the notice that they've fallen out of love with bus service work from years of working for TfGM. I recall a Bus & Coach Buyer article from the early 2010s in which they were praising TfGM and vindicating their decision to go into the local bus market. Would be happy to scan it in if people are interested.
 

WatcherZero

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I can quite believe that for the large franchises which will have turnover in the hundreds of millions (for instance Go Ahead said winning 7 of the 9 first mini franchises would bring annual revenue of £18.7m) having a bond would be desirable to protect the public against an operator walking away, running down a service or going bankrupt not unlike the Rail franchise bonds.
 

323235

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Source, please!

The 391/392 went part commercial from the 17th April according to VOSA.

https://www.vehicle-operator-licens...registered-local-bus-services/details/608101/

Bus registration details
Registration number PC0002043/1
Licence Number PC0002043
Variation number 0
Status Registered
Service number. 391, 392
Service type Normal Stopping
Start point Stockport Bus Station
Finish point Macclesfield Bus Station
Via Poynton, Hazel Grove, Bollington
Date received 07 Mar 2023
Effective date 17 Apr 2023
End date
Supported by subsidies? In Part
Local authorities covered by route Transport for Greater Manchester (TFGM)
Cheshire East Council
TAOs covered by route North West of England
 

northwichcat

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Great that they've sorted their staff replacement jobs, that's certainly something, but the rest of it sounds like the typical moan of an operator who just doesn't want to comply with requirements surrounding quality and due process, and thus one that we're probably better, as I said above, without.

Though if they've had a high accident rate it would be interesting to know why, e.g. are timetables unrealistic so drivers have to "rag round", and who set them?

They have been known to allow too many passengers to board a service. For example, their Fiat minibuses say they have 1 standing space if it's not being used by a wheelchair. Yet I've been on ones where there's been 15 standing. If there was accident that occured on a bus that had around 38 on board when it shouldn't have had more than 24, I think the insurers would increase their premiums significantly.

I wonder if D&G will go for the 288's? As they used to run them for a few years. D&G have just took on a load of new routes commercialy & on a tender.

Didn't Mr Peddle throw his toys out of the pram over a relatively minor dispute and withdraw from Manchester as a result?

Julian Peddle did complain to a trade publication about TfGM for the level of reporting they were requiring operators to provide to get extra COVID support. D&G stopped running the 288 soon after but the Greater Manchester High Peak routes don't seem to have changed.
 

M803UYA

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They have been known to allow too many passengers to board a service. For example, their Fiat minibuses say they have 1 standing space if it's not being used by a wheelchair. Yet I've been on ones where there's been 15 standing. If there was accident that occured on a bus that had around 38 on board when it shouldn't have had more than 24, I think the insurers would increase their premiums significantly.
Insurers do increase premiums and excesses on drivers who have high accident rates - or rather are involved in claims against the operator's insurance. Larger operators like First self insure but most operators don't do this. One way to cut down your premium is a high excess - insurers have been known to increase it on drivers who are involved in multiple accidents. That could pose a problem to a bus operator that doesn't have their pick of the driver pool, and is having to employ people dismissed from others operators for having accidents. If you have tendered for the work at a given price, it's an additional cost that eats into the profit from the work.
 

323235

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The 288 operates wholly within Manchester, do the High Peak ones not also get funding from other councils?

High Peak did try to pull out of the 199 past New Mills to Manchester Airport and see what the contractual offer would be from Derbyshire and TfGM but it clearly wasn’t favourable as they retained the daytime journeys commercially and even reinstated the evening journeys to the Airport with no subsidy listed on the registration with VOSA.


VOSA said:

Registration number PC0001086/53
Licence Number PC0001086
Variation number 15
Status Registered
Service number. 199
Service type Normal Stopping
Limited Stop
Start point Buxton (Market Place)
Finish point Manchester Airport (Bus Station)
Via Chapel - En - Le - Frith
Date received 15 Dec 2022
Effective date 29 Jan 2023
End date
Supported by subsidies? No
Local authorities covered by route Derbyshire County Council
Transport for Greater Manchester (TFGM)
Cheshire East Council
 

NorthernSpirit

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Most private operators will have a right of centre leaning otherwise they wouldn't be in business! All businesses trim accordingly so that any dead wood is removed before the entire enterprise rots, those that fail sees the entire place go to pot - which is a sign of a badly ran bussiness.

However, if there is a threat of franchising then it would be logical to pull the plug beforehand as the risk of bidding could mean one of three things:
- The incumbant loses, they then have to hand over their property (which has been bought as an investment) to the winners who'll then decide that they would rather use a different brand of bus - so perfectly useable fleet is binned because the winner want something else.
- The incumbant wins, but because they've bidded a stupidly large bid, they have to cut services and/or frequency to make up the shortfall.
- The incumbant wins, but by default.

There is a fourth option which could be biased towards larger operators which would mean Joe & Jane Busways established 1927 is squeezed out of business through no fault of their own. I cannot see any half decent independant wishing or wanting to hand over their property to a plastic county council who wants to emulate London in every way shape and form, I just can't.

I’ve been in Manchester this week, the Little Gem stuff looked as badly turned-out as the UK North stuff was back in the day. Whether they’d already given up I don’t know, but it didn’t scream professional operator.
There is a possibility that Little Gem may have been slowly winding down their operations, hence why the fleet appeared to look badly turned out.
 
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Around this time yesterday, the Little Gem announcement on the TfGM website had been updated to show all the school services now had operators. The majority would be Atlantic Travel of Bolton with a couple covered by Red Rose (presumably both subcontracted from First Travel Solutions).

This morning it had changed and four of what were previously shown as Atlantic routes "will not operate until further notice due to driver shortages". By 1pm that had increased to five routes and the one surviving route, the 755 "will be covered on Tuesday 25 April by Atlantic Travel GB, but from Wednesday 26 April will not operate until further notice".

Anyone familiar with Atlantic's operations would have to wonder how low the rates offered for these contracts were if even they have thrown them back.
 

northwichcat

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Around this time yesterday, the Little Gem announcement on the TfGM website had been updated to show all the school services now had operators. The majority would be Atlantic Travel of Bolton with a couple covered by Red Rose (presumably both subcontracted from First Travel Solutions).

This morning it had changed and four of what were previously shown as Atlantic routes "will not operate until further notice due to driver shortages". By 1pm that had increased to five routes and the one surviving route, the 755 "will be covered on Tuesday 25 April by Atlantic Travel GB, but from Wednesday 26 April will not operate until further notice".

Anyone familiar with Atlantic's operations would have to wonder how low the rates offered for these contracts were if even they have thrown them back.

Atlantic do seem to commit to things they can't deliver though, especially when it comes to rail replacement work.
 
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mangad

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Apropos to nothing, but Little Gem's owners also recently sold their Eccles depot to Rotala - so Diamond now have space for their forthcoming franchised services, and no doubt a good number of ex Little Gem drivers to drive them.

Rotala (AIM: ROL.L), an operator of bus routes in the UK for businesses, local authorities and the general public, is pleased to announce the acquisition in the Eccles area of Greater Manchester of a freehold depot from WAG Holdings Limited for a consideration of £1.9 million payable in cash (the "New Eccles Depot").



In its circular to shareholders dated 26 January 2023, the Company set out its capital expenditure plan for freehold property in each of its 2023 and 2024 financial years. In that plan, the Company stated that it expected to build a new freehold depot in the Eccles area to compensate for the proposed disposal of its Bolton depot as part of the franchise process in Greater Manchester. However, subsequently, the Company has instead been able to acquire the New Eccles Depot which is directly opposite its current depot in Eccles.



The New Eccles Depot, taken together with the Company's existing depot in Eccles and the planned short-term lease of another small depot in central Bolton, will provide ample space for the Company's operational needs in the Greater Manchester area for the foreseeable future. It will no longer be necessary therefore for the Company to build a new depot in the Eccles area.
 

WatcherZero

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Update, those awarded to First Travel won't operate before the end of the week at the earliest it seems they've committed to something they couldn't provide. Temporary providers have been found for most of the services they were supposed to pickup this week. As of 5pm Tuesday this is the current arrangements with 4 of the axed school services finding replacement temporary operators during today.

The school bus routes which have been withdrawn

  • 789 - Blessed Thomas Holford Catholic College
School bus routes with emergency cover

  • Altrincham Boys Grammar School - 755 and 758
    The 755 will be covered by Phantom Travel from Wednesday, April 26, until Friday April 28
    The 758 will be covered from Tuesday, April 25 by Red Rose
  • Altrincham College - 773 and 774
    The 773 will be covered from by Belle Vue
    The 774 will be covered by TJs Travel from Wednesday, April 26, until Friday, April 28
  • Altrincham Girls Grammar School - 758 and 760
    The 758 will be covered by Red Rose
    The 760 will not operate until further notice
  • Barlow RC High School - 719
    The 719 will be covered from Monday 24 April by Belle Vue
  • Flixton Girls' School - 795
    The 795 will be covered by ABC Coach Hire from Wednesday, April 26 until Friday, April 28
  • Loreto Grammar School - 755, 758 and 760
    The 755 will be covered by Phantom Travel from Wednesday, April 26, until Friday, April 28
    The 758 will be covered by Red Rose
    The 760 will be covered by Phantom Travel from Wednesday, April 26 until Friday, April 28
  • Sale Grammar School - 783
    The 783 will be covered by Red Rose
  • St Ambrose College - 761
    The 761 will be covered fby Belle Vue
  • Urmston Grammar School - 795
    The 795 will be covered by ABC Coach Hire from Wednesday, April 26, until Friday, April 28
  • Wellacre Academy - 795
  • The 795 will be covered by ABC Coach Hire from Wednesday, April 26, until Friday, April 28
Regular services which have been withdrawn

  • 44 - Manchester – MRI – Moss Side – Didsbury – Wythenshawe Hospital - Altrincham
  • 84 - Withington - West Didsbury - Mersey Bank Estate - Chorlton
  • 217 - Manchester – Clayton - Droylsden - Ashton-under-Lyne
  • 260 - Sale - Ashton upon Mersey circular
  • 261 - Sale - Ashton upon Mersey circular
  • 262 - Sale - Sale Moor - Brooklands circular
  • 280 - Altrincham – Dunham Massey - Partington - Carrington - Sale
  • 288 - Altrincham - Hale - Hale Barns - Manchester Airport
  • 375 - Stockport - Offerton – Stepping Hill Hospital – Hazel Grove - Marple - Mellor
Regular services with an alternative operator

First will accept Little Gem tickets this week on the following services:

  • 336 - Ashton-under-Lyne - Smallshaw - Hazelhurst - Hurst circular
  • 337 - Ashton-under-Lyne - Hurst - Hazelhurst - Smallshaw circular
  • 389 - Ashton-under-Lyne - Stalybridge - Dukinfield circular
 
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Greybeard33

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A story giving Goodwins version of events:
The owner of defunct bus operator Little Gem has hit back at claims that Transport for Greater Manchester (TfGM) had no notice of a likely closure of the business, which was announced on Friday 21 April and came after service the following day.

Wesley Goodwin says that he first informed TfGM of the scale of Little Gem’s challenges in November 2022. Those were caused largely by fuel prices peaking at double the level in play when tenders were submitted, and rapidly increasing staff and insurance costs.

Mr Goodwin claims that he at that point informed the body of wishes for help with contract payments and to reallocate some work to another business, but that TfGM instead pointed to a need to continue running to the original terms. Doing so had left Little Gem losing up to £30,000 per month.

He adds that with after losses continued to mount, there was no option than to cease operation and liquidate the business. Its O-Licence has already been surrendered.
“I was no longer willing to continue running Little Gem. To do so would eventually have left us unable to satisfy financial standing requirements,” Mr Goodwin explains.

“We sought to work with TfGM to find a solution. It threatened Little Gem with action if services did not continue to operate in accordance with the original terms. TfGM received notice several months ago that all was not well. We asked for help to reflect fuel prices, but none was offered. At the end, Little Gem could not afford to keep operating.”
TfGM acknowledges the challenges that Little Gem and others – including itself – have faced. Deputy Director of Bus Services Alison Chew adds: “The contracts awarded to Little Gem followed the standard tendering process undertaken for all contracted bus services, and it has been treated no differently to any other operator.”
Little Gem is a separate company to Go Goodwins Group and Mayne Coaches. Those businesses are unaffected by the development. Both continue to trade are in healthy financial positions, Mr Goodwin says.

While all contracts operated by Little Gem for TfGM ceased after 22 April, a service undertaken on behalf of Cheshire East Council was moved to the Go Goodwins Group O-Licence earlier in April with that local authority’s agreement. It continues to run and will see new vehicles shortly.

Little Gem had sought the same transfer of TfGM contracts. That would have allowed costs to be cut and financial stability to be regained if the Little Gem work was consolidated with services undertaken by Go Goodwins, Mr Goodwin claims.
So effectively Goodwins threw their toys out of the pram because TfGM refused to pay Little Gem more than the agreed terms in the contracts for the tendered services. And there is a hint that relations had broken down over franchising:
Driver-related issues have also been cited as a contributor to Little Gem’s difficulties, with Mr Goodwin noting that the franchising of Greater Manchester’s bus network currently underway had created uncertainty among some former staff.

That was based upon the lack of any franchise contracts for local services in the first round being awarded to small operators, he says. Mr Goodwin adds that such a position is leading drivers to consider moving to larger companies that they perceive as having a better chance of succeeding in subsequent tranches.
 

M803UYA

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A story giving Goodwins version of events:
I can see why you've taken the view you have as it's a logical one to take. But fuel surcharges have been applied by a number of councils up and down the country as a response to the doubling of fuel prices. After driver costs this is the largest single cost to an operator. It's possible that the operator doesn't store fuel on site, and has to fill up at a filling station, in which case they'll be paying the at pump price. You then become vulnerable to price variations. I think it more likely Goodwins will have fuel cards which drivers can use - so the pence per litre is agreed with the card provider. If TfGM don't want to recognise that, then they'll see operators hand in tenders.

The insurance and staffing situation is to a greater extent within the operator's powers to resolve. But hiring drivers will be harder as fewer people want to drive buses. You'll also not be first in the queue with a pool of drivers - the big operators will be the ones who can train car licence holders and would be the first port of call for a wannabe bus driver. Therefore you have to use a pool of drivers who could have high accident rates, and people who've been dismissed from the employment of the big companies. That comes with it's own risks, notably insurance as the insurer will accept them on the policy, but they'll be on a higher excess (amount you pay in event of an accident even if you claim) than someone who is a lower 'insurance risk'.

If you want to pay more for your drivers, yet have been constrained by TfGM's 'we wish to stay on the original terms' policy on that and with fuel prices doubling your only option is to hand in the tender. Which we have seen a lot of from operators. This, in a roundabout way is where Goodwins have ended up. The school work that has also been surrendered would perhaps have been something they'd have liked to have retained.

Where I reside (on the other side of the Pennines) on the border of West Yorkshire, the SEN schools work is tendered by Metro on an annual basis. So each June, they issue tenders for the coming school year. As the work is 'annual' that informs the fleet used on the work by operators. Helpfully, though the annual tendering process meant that the then current fuel pump prices being £2.00ppl was reflected in the higher prices tenders were put in at. On this type of work the margins are even slimmer - drivers aren't paid when the buses don't work. Now that pump prices have come down, the reverse situation for the final few months of the school year is now taking place (operators are being paid more than they were when fuel prices shot up yet were running on the June 2021 contract price)
 

northwichcat

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But fuel surcharges have been applied by a number of councils up and down the country as a response to the doubling of fuel prices.

Contract terms can be very different between councils. Tendered bus services aren't all free of any financial risk. The ones that allow for the biggest profits when things go well, also expect the operators to stump up reserves when things go wrong. If they want a risk-free they need to take on management style contracts where the operator gets a fixed fee for running the services and then all fares taken get paid to the local authority.
 

Djb1

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Its good to see the Goodwins side of the story, but some of it does sound a little of biting off more than they could chew, or taking too much of a risk (perhaps to increase the operation size before franchising?)

The section about wanting to re-allocate some work to another side of the business for cost savings is a little confusing for me, especially as until fairly recently they operated from the same site anyway. Its the kind of statement where you could almost read that they wanted to find a way of keeping their long standing/traditional school tenders, but dispense of the full service contracts.

Im fully expecting the "new" vehicles for the 391/2 to be the bluebird orions.....
 

Greybeard33

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If you want to pay more for your drivers, yet have been constrained by TfGM's 'we wish to stay on the original terms' policy on that and with fuel prices doubling your only option is to hand in the tender. Which we have seen a lot of from operators. This, in a roundabout way is where Goodwins have ended up. The school work that has also been surrendered would perhaps have been something they'd have liked to have retained.
AIUI "handing in the tender" would normally be a prescribed process with a notice period, in accordance with the terms of the contract. That is very different from the Goodwins "nuclear option" of winding up a subsidiary company and surrendering its O-licence with only one day's notice, in order to avoid any financial liability to the Go Goodwins Group holding company.

Other operators of GM tendered services are presumably subject to similar TfGM contractual terms but seem to have managed to absorb cost increases. This suggests that Little Gem might have underbid to win the tenders.
 

northwichcat

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Im fully expecting the "new" vehicles for the 391/2 to be the bluebird orions.....

It's interesting the 391/392 continues to operate to a reduced frequency and using old vehicles, with Go Goodwins having sold the MMCs that were originally purchased to run the service. The Selwyns contract ended early after they used Solos that were both older and smaller than what the contract specified.

Having been on their minibuses between Altrincham and the airport, I'm not sure they are suited to a long route.
 

Titfield

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AIUI "handing in the tender" would normally be a prescribed process with a notice period, in accordance with the terms of the contract. That is very different from the Goodwins "nuclear option" of winding up a subsidiary company and surrendering its O-licence with only one day's notice, in order to avoid any financial liability to the Go Goodwins Group holding company.

Other operators of GM tendered services are presumably subject to similar TfGM contractual terms but seem to have managed to absorb cost increases. This suggests that Little Gem might have underbid to win the tenders.

AIUI The Traffic Commissioner has to accept the surrender of a licence. He / she can refuse to accept the surrender and may call the operator to a PI.
 

323235

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It's interesting the 391/392 continues to operate to a reduced frequency and using old vehicles, with Go Goodwins having sold the MMCs that were originally purchased to run the service. The Selwyns contract ended early after they used Solos that were both older and smaller than what the contract specified.

Having been on their minibuses between Altrincham and the airport, I'm not sure they are suited to a long route.

That is because CEC have been going through a process of revising subsidy criteria and therefore there was obviously positive dialogue between the Council and Go Goodwin’s - the service originally operated on the Go Goodwins licence before going over to Little Gem and the latest change was registered some weeks in advance of 17th April with the service reducing from a fully subsidised to a commercial service with financial support.

What is likely is Go Goodwin’s tried to engage with TfGM right until the bitter end until it was no longer financially possible to continue operating Little Gem.

At the end of the day this is the difficult world of operating buses in the 21st century and business is business unfortunately.
 

M803UYA

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But how does that work if the operator has ceased trading and no longer has any officers or employees?
In the case of Nippy Bus down in Somerset, the licence was revoked by the traffic commissioner. The former owner had applied to surrender it, but the commissioner isn't bound to accept a surrender. He was given a 10 year ban from holding an operators licence. They ceased operations with 12 hours notice. In the case of D Jones & Son, the former owner was banned for stopping services with next to no notice. The precedent doesn't favour Goodwins in this respect - they're looking at licence revocation at the worst instance. They don't have a regulatory history but then neither did Nippy Bus.
 
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Observer

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It's interesting the 391/392 continues to operate to a reduced frequency and using old vehicles, with Go Goodwins having sold the MMCs that were originally purchased to run the service. The Selwyns contract ended early after they used Solos that were both older and smaller than what the contract specified.

Having been on their minibuses between Altrincham and the airport, I'm not sure they are suited to a long route.
They would be better off selling them, there is always demand in the market for low floor minibuses.

I always see operators looking to buy Mercedes in particular but the Fiats being fairly new might be a compromise for the time being.
 
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