London-based MET has proven that its approach works in Germany, and is ready to move up a gear

David Leeder has a new favourite word – ausgebucht. It means ‘booked out’ in German. It’s proof that his vision of exporting commercial techniques honed in Great Britain’s bus industry to Germany is succeeding.Europe’s largest market for passenger transport services is attracting increasing interest from foreign companies, and London-based Marwyn European Transport (MET), the venture co-founded by Leeder in February 2011, is among those seeking to take advantages of the opportunities available.

Among those opportunities is the largely untapped market for domestic and cross-border express coach services. MET entered this market in January 2012 when it purchased Publicexpress, operator of a coach service linking Groningen in The Netherlands with Oldenburg and Bremen in Germany. Using the service as a laboratory, MET introduced flexible fares and UK-style branding and marketing techniques, including a makeover by Ray Stenning, Britain’s passenger transport branding guru. At first there was a lot of nervousness among the firm’s managers, but the result of this experiment has been a doubling of passenger volumes.

As ‘ausgebucht’ became an increasing familiar term on this service,  MET responded by doubling the frequency from four to eight services a day and setting up through ticketing arrangements with other operators to enable onward journeys from Bremen to Berlin and Hamburg. Meanwhile, in June this year, an additional cross-border Publicexpress route was launched along the Rhine valley, linking Strasbourg in France with the German cities of Karlsruhe, Heidelberg and Mannheim. It’s already selling out every week.

“We are very convinced now based on our 18 months of experience that this [business model] is relevant in Germany,” says Leeder. “We see many more opportunities to develop these kind of routes.”

Leeder introduces MET’s strategy as “ABCD”. A is for ‘acquire hub’ and MET has now acquired three – first was the Rhine-Ruhr region, where it bought 100-vehicle bus operator Tuecks in July 2011; second was Frankfurt, where 130-vehicle BRH was bought from the UK’s FirstGroup in September 2011; and the third and final hub is Oldenburg/Bremen, which is the home of Publicexpress.

The next steps are B, ‘bolt-on sub-scale companies’; C, ‘contract wins’; and D, which stands for distance, ‘add long distance services’.

The local management teams at MET’s three hubs are empowered to run their companies and are not micro-managed from London. MET’s role is to support their growth ambitions by providing expertise on bidding, marketing, pricing knowledge and route costing, better management information and access to capital.

It’s a formula that has seen MET grow rapidly. Turnover increased from £4.9m (5.6m Euros) in 2011 to £18.1m (22.4m Euros) in 2012 – and is expected to be over 30m Euros this year. Meanwhile, Leeder and his colleagues expect bus EBITDA to exceed 2m Euros this year, up from 1m Euros in 2012.

Leeder says MET has only scratched the surface. At any given time, he says that he and his colleagues are talking to around 30 German bus and coach operators, with discussions ranging from an informal chat over a coffee to due diligence. The company may consider a listing in order to raise the funds required to fully exploit the German market’s potential.

“We see lots of opportunities to deploy capital profitably,” Leeder explains. “We’re very pleased with the initial pilot deals and we now want to grow at a faster rate.”

But Leeder isn’t the only Brit with his sights on the German market. His former colleague, Dean Finch, is also keen to get a slice of the action. The pair were both members of FirstGroup’s main board, latterly with Leeder as group development and marketing director and Finch as chief operating officer. Both left the Aberdeen-based group in 2009.

Finch is now chief executive of National Express Group, the largest provider of express coach services in the UK and Spain. His ambition is to build Germany’s largest express coach network and in April this year National Express launched ‘city2city,’ taking advantage of the lifting of restrictions on the operation of express coach services within Germany on January 1, 2013 (echoing the liberalisation which happened in the UK in the early 1980s).

city2city now operates a fleet of 22 coaches on five routes. Three of the routes link Frankfurt with Munich, Dusseldorf and Duisburg. The other two link Cologne and Hamburg, with one travelling via Duesseldorf, Duisburg, Muenster and Bremen, and the other stopping at Dortmund and Hanover.

Meanwhile, in December 2015, National Express will start operating two regional rail contracts in the North Rhine-Westphalia.

Leeder thinks that its only a matter of time before Sir Brian Souter gets involved in the German market – either through Stagecoach or his own Souter Investments vehicle (his Polskibus operation already runs a cross-border service between Warsaw and Berlin). However, he believes that there are plenty of opportunities to go around.

“The fact is that even if Brian said he was going to come into Germany there’s no way that any one person can run all the potential routes – not unless they’ve got unlimited amounts of money. There’s just too many routes,” he says.

Some of these routes are less obvious than others. While National Express are creating a network that links Germany’s biggest cities, mirroring its existing networks, MET is seeking to identify more obscure, but potentially more lucrative, opportunities. To draw a comparison with the UK, Leeder sees Publicexpress as being more like Stagecoach Express or Scottish Citylink.

“There’s plenty there for everyone. It’s a very big under-developed market. We don’t intend or expect to have it all ourselves,” he says.

The lifting of restrictions on domestic services has led to the introduction of dozens of new express coach services across Germany, but Leeder thinks that some of the best city pairs for “our type of service” remain cross-border. Guy Houston, MET’s finance director and formerly finance director for FirstGroup’s UK bus business, explains that this is because the railway alternative for these journeys is often weak or non existent.

“I’m sure lots of people will make money between Frankfurt and Cologne but, to draw a UK comparison, a route like Swansea-Gatwick Airport is more profitable than Swansea-London,” says Houston. “The railways are internal within the country but not really going across borders. To go from Mannheim to Strasbourg, it’s only two hours on the coach but the train requires at least one change – yet Mannheim and Strasbourg are natural places where people would go to and from. They just happen to be in two different countries.”

MET’s Publicexpress coaches may be ‘ausgebucht’ but the market for new passenger transport services in Germany shows no sign of being booked out in the near future.


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