Stagecoach chairman Sir Brian Souter has revealed that he sought to team up with EasyGroup’s Stelios Haji-Ioannou before launching Megabus

 

Brian Souter promoting Stagecoach’s new Megabus venture in 2013

 

From the freeways of North America to Germany’s Autobahn, Stagecoach’s blue and yellow Megabus-branded coaches have become an increasingly familiar sight over the past decade. However, they could have been branded in the bright orange of Stelios Haji-Ioannou’s EasyGroup.

Addressing the annual ALBUM (Association of Local Bus Company Managers) conference in Cheshire last week, Stagecoach co-founder and chairman Sir Brian Souter revealed how he sought a deal with Haji-Ioannou before launching Megabus in 2003.

New low cost carriers like Haji-Ioannou’s EasyJet had revolutionised the air travel market and Souter saw an opportunity to reinvent express coach services, but he could not persuade his predecessor as Stagecoach’s chief executive (Keith Cochrane). When Souter returned to the role of chief executive in 2003 he decided to investigate the potential.

“I went to see Stelios as I thought, you know, they’ve got a fantastic brand and so surely he’s the first man that I should speak to?” he recalled. “I know Stelios, not that well, but I know him well enough, and so we had a chat. He’d identified a great opportunity with EasyBus and I said, ‘Look, we’ve got the footprint, if you guys go with us, I think we can build a fantastic business under your brand.’”

It didn’t happen, however. “He just wanted too much money basically,” Souter explained. “There was a value to me, but it wasn’t the value that he thought it was. And so I said to him, look I’m going to do this anyway, so you’d better get a pair of trainers on as I’m going to go really, really fast.”

He added: “Time was moving on and I felt that it was a big opportunity. There was a risk that we could have sat there as the big donkey bus company and not have done this.”

Later that year, Stagecoach spent £16,000 on a website and launched a pilot Megabus service between Glasgow and Dundee with two 96-seat double deckers. The vehicles were around 12 years old and were powered by 6LXCT Gardner engines – one did 55mph and the other did 52mph and the drivers affectionately called them the snail and the slug.

The vehicles may have been slow but Stagecoach was outpacing Haji-Ioannou’s EasyBus, which began operating minibuses in July 2004 between London and Milton Keynes.

“It was actually quite exciting to reinvent the express network using Megabus,” said Souter. “Very soon we realised we were onto something here. We had proof of concept and rolled it out very quickly.”

Roll out was made easier because in 2003 Stagecoach sold its Hong Kong bus business and it brought back a fleet of high-diff Olympians to the UK. “Because we got them for nothing as part of the sale it was a very cheap start-up, and as you know it has grown and grown and grown.”

Today, Megabus-branded services in the UK and North America generate annual revenues of more than £150m, and the brand is now expanding rapidly in mainland Europe.

In contrast, EasyBus remains a fringe player, and is now focussed on providing express coach services to and from London and three of its main airports.

 

This article appears inside the latest issue of Passenger Transport.

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