New routes registered after First’s plans to sell in North Devon unravel

Stagecoach has announced that it is to expand its bus operations in North Devon as a result of FirstGroup’s decision to close its bus business in the area.

The Perth-based group had been in negotiations to acquire First’s Barnstaple operations, but withdrew from the sale process after the Office of Fair Trading referred the proposed acquisition to the Competition Commission. Stagecoach said that it could not “justify spending further money and management time on what has already been a lengthy process”.

The decision led First to announce earlier this week that it was to close the 30-vehicle Barnstaple operation. The group said that the business had underperformed for a number of years, despite the introduction of a “variety of marketing and promotional initiatives”.

“The company is now faced with extra cost pressures due to the economic climate and cuts in external funding and routes are now being discontinued in order to ensure the long term sustainability of operations elsewhere,” said First in a statement.

Giles Fearnley, managing director of the group’s UK bus division, added that the decision to close the North Devon operation was part of a strategy to  “reposition and rebalance” the groups bus portfolio in the UK in order to restore operating margins.

He continued: “The decision by the Office of Fair Trading to refer our proposed sale of our North Devon operations, where we had a uniquely high degree of overlap with Stagecoach, was disappointing. We are confident, however, of future successful transactions in the coming months as a number of potential bidders exist in the markets where we have identified other businesses for disposal.”

However, within days of First’s announcement, Stagecoach revealed that it would be introducing four new routes in North Devon and make enhancements to a number of its existing routes in the area.

The group added that the expansion would add around a dozen extra vehicles to its Barnstaple fleet and that Stagecoach would be seeking to recruit additional staff.

“We have now registered new commercial Stagecoach services that will extend our network in the North Devon area and provide more journey options for our customers,” said Michelle Hargreaves, managing director of Stagecoach South West. “The new services, which have been registered with the traffic commissioner, will start in September.”

Meanwhile, Newquay-based independent Western Greyhound has also announced that it will increase frequencies on the Bude – Okehampton – Exeter corridor as a result of First’s withdrawal. The move is likely to bring the operator into conflict with Stagecoach which has registered a new route on the same corridor as part of its expansion plans.

 

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