The current West Midlands bus network operated by National Express will be ‘preserved’ until the end of the 2024 financial year, despite NX Bus and its parent company Mobico recording losses for the first half of 2023.
Route-One reported today:
Meanwhile, NEWM has reached agreement with the West Midlands Combined Authority and the Department for Transport (DfT) on funding that, when combined with a recent fare increase, will enable preservation of the operator’s current network to the end of FY2024.
It it thought that this money is part of the Bus Service Improvement Plan (BSIP) allocation to the West Midlands. Such use was enabled by a recent DfT change of policy away from a previous approach of mandating that BSIP funds could not be used to support existing services. The West Midlands was not among areas in England to receive a first-year BSIP Plus allocation.
Commercial patronage on NEWM services is now above 97% of 2019 levels. Mobico expects that no further revenue support will be needed beyond the current agreement.
“Tom Stables and David Bradford leave National Express” – Route-One, 28th July 2023
This is good news then, as it means we’re not likely to see any major service cuts or withdrawals until 2025 – unless I’m misunderstanding how the ‘financial year’ works! – and there are signs that passenger numbers are recovering significantly.
But this is why bus fares had to increase. I’ve seen comments elsewhere from people blaming the recent driver’s pay increase for this, but it is simply not true. Wage increases will of course add to the operating costs of any business, but also consider that due to inflation, many other costs have also increased.
People may remember the bus strikes that took place earlier this year, where the local media unquestioningly parrotted the claims made by the Unite union of NX West Midlands making ‘millions of pounds of profit’, based on the 2022 financial performance of the whole National Express Group (rebranded as Mobico earlier this year), of which the UK bus operations made a very small contribution, as ‘justification’ for their increased wage demands.
The above Route-One article neatly summarises the half-year report for 2023, and suddenly we have a different picture. The report begins by announcing that both Tom Stables and David Bradford will both be leaving National Express UK.
That change was announced by parent Mobico Group CEO Ignacio Garat at an investor conference following publication of Mobico’s results for the six months to 30 June, a period that saw a group loss after tax of £39.4 million on revenue of £1.57 billion. Mobico is the renamed National Express Group business, although the National Express brand is retained in the UK.
Mobico revenue was up significantly from the £1.32 billion of H1 2022, but Mr Garat notes that cost pressures and a reduction in government recovery funding led to a reversal of the £15.2 million group profit after tax for that earlier period. H2 2023 is expected to perform better than H1, the group says.
Combined National Express operations in the UK delivered H1 2023 revenues of £285.4 million and an adjusted operating loss of £10.8 million. Industrial action at NEWM cost up to £3 million, according to Mobico Chief Financial Officer James Stamp.
“Tom Stables and David Bradford leave National Express” – Route-One, 28th July 2023
Like all other bus operators in the region, despite their size, NX Bus are also struggling to keep services viable. Yes, they are a big company that dominates the West Midlands bus market, and I know there are many people who would take great pleasure at seeing their demise, but who would replace them?
Sometimes you have to be careful what you wish for, because you might end up with something worse.
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