With COVID-19 already causing events to be cancelled and companies placing travel restrictions on staff, demand for public transport could fall

 

 

Bus and rail operators could suffer turbulence in the coming weeks and months if people amend their behaviour in response to the COVID-19 coronavirus.

UK authorities are not advising people to avoid public transport, but last weekend UK newspapers reported on new COVID-19 advice from the World Health Organisation. The Daily Mail’s article began: “Everyone aged over 60 is being advised to avoid crowded areas including trains, buses and even supermarkets to prevent catching coronavirus.”

People aged 60 and over make up a large proportion of bus passengers, particularly with free concessionary travel being available. Reduced patronage by pass holders would reduce revenue for operators in areas where reimbursement is directly linked to actual journeys.

The blow would be cushioned where this year’s revenue has been agreed between authorities and operators, but reduced demand this year could have a bearing on next year’s revenue settlement.

Some events which generate demand for transport have been cancelled or postponed. They include this Saturday’s Ireland versus Italy match in the Six Nations rugby championship, which would have attracted visitors from Italy to Dublin.

I could imagine that it would drive a few independents out of business

Transport commentator Chris Cheek said the impact on the bus industry depended on how long the situation lasted. “I could imagine that it would drive a few independents out of business.”

It could delay DB’s plans to float Arriva, he said, while the repercussions in some areas depended on “how deep FirstGroup’s and Stagecoach’s pockets are”.

Downsizing and laying off staff in response to reduced demand was not an easy option, since it would have a substantial cash downside for operators.

While some pensioners might react to the WHO advice by making journeys by car instead of bus or train, equally there could be a reduction in car travel if people were advised to avoid shops or work from home, Cheek observed.

Employers such as call centre companies would face costs in setting up home working, but people who switched to home working in response to the virus threat might never return to commuting. “It could have long-term effects,” said Cheek.

He also suggested that reduced rail passenger demand as a result of COVID-19 could come under “force majeure” exemptions, rather than being a cost franchise holders would have to bear alone.

The Department for Transport declined to provide any clarification on the matter. “We don’t comment on speculation,” said a spokeswoman.

An industry insider said TOCs would be able to compare new data with previous years, possibly broken down by age group, to present a case for force majeure. They could do that even if the government did not advise people to reduce travel or avoid public transport. “If the government gives specific advice to stay at home, the case then becomes indisputable.”

He added some franchise agreements included automatic provisions linked to economic activity which would reduce the franchise premiums payable in the event of a fall in GDP.

Analyst Tom Callan, of Investec Securities, said the impact of coronavirus advice or restrictions on operators partially depended on contract structures. For example, London bus operators received the same revenue whether the bus was full or carried one passenger.Investec Securities is Go-Ahead’s broker. Callan said Go-Ahead was relatively well insulated because it was London’s largest bus operator and did not take the farebox risk in the large Govia Thameslink Railway management contract.

The current government advice is that there is no need for people to stop using buses or other forms of public transport

A CPT spokeswoman said: “The current government advice is that there is no need for people to stop using buses or other forms of public transport. All bus and coach operators have extensive cleaning and hygiene regimes in place to ensure services are fit for use. As the situation evolves the industry will continue to follow the advice from public health bodies and introduce any additional measures that are recommended or required and also keep passengers up to date on any changes to services.”

A Rail Delivery Group spokesman said: “The health and wellbeing of our staff and passengers is our primary concern, and the rail industry is working closely together to ensure that the latest government advice regarding COVID-19 is shared and followed.”

The government updated its COVID-19 guidance for staff in the transport sector on Monday. The guidance primarily relates to international transport. It says: “Currently Eurostar has no enhanced port health monitoring in place, although this will be kept under review.”

IT-TRANS postponed due to health fears

IT-TRANS 2020, the world’s largest event dedicated to digitalisation in public transport, was due to take place in Karlsruhe, Germany, this week (March 3 – 5), but the conference and exhibition has been postponed due to coronavirus.

Co-organisers UITP, the international union of public transport, said queries and health concerns of IT-TRANS participants increased significantly last week. A growing number of EU-based companies have imposed business travel restrictions or even bans on their employees.

 
This article appears in the latest issue of Passenger Transport

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