Loss-making operation expected to be broken up and sold to three buyers as poll finds three-quarters are in favour of re-regulating the region’s buses

 
The Manchester business has been part of First for 22 years

 

FirstGroup is understood to be close to completing the sale of its loss-making bus operations in Greater Manchester.

It would be the first time that one of the UK’s ‘Big Five’ bus groups has exited one of the country’s major metropolitan areas, outside of the regulated London market. These areas have traditionally been dependable profit centres for operators, but First Manchester is making a loss.

The 687-vehicle business, which now operates from just three depots – Manchester, Bolton and Oldham – made a £5.8m operating loss on turnover of £86.1m in 2017/18. According to The Telegraph, industry sources have indicated FirstGroup might sell each of the three sites to different purchasers, netting as little as £20m. The group paid £68m for the former GM Buses North operation in 1996, when it operated a fleet of 1,000 vehicles.

The unnamed trio of buyers do not appear to have been deterred by the prospect of a London-style franchising regime for bus services in Greater Manchester. The region’s mayor, Andy Burnham, is examining this option closely.

Pro-regulation campaign group Better Buses this week published the results of a survey of 1,000 people. Carried out on its behalf by Survation, the poll found that 76% wanted the region’s bus network to be fully regulated for the first time since 1986.

The Onebus consortium of 18 Great Manchester bus operators (which includes First Manchester) has offered a rival £100m blueprint for improving bus services without the need for re-regulation (PT201).

A FirstGroup spokesperson said: “We don’t comment on market rumours or speculation. We keep all bus services, depots and the business portfolio under constant review so we can be responsive to changes in market conditions.”

 
This article appears in the latest issue of Passenger Transport.

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