11 June 2010

Mass default

We very often receive emails which are aimed at tipping us off about forthcoming news stories; others are purely gossip. Some, when either received on numerous occasions or from people who've 'come good' in the past, catch our attention. One such email has repeatedly been sent to us by no fewer than four seemingly unrelated people, concerning the 2016/2017 accessibility legislation deadline.

If you're unaware of this home-grown piece of legislation, let us briefly detail it. From 1 January 2016, all single-decker PCVs operating stage-carriage, passenger bus services here in the UK, with a minimum capacity of 22 seats, must be fully accessible for disabled people. The same applies to all double-deckers, conforming to the same criteria, from 1 January 2017. Coaches don't escape - they must conform by 1 January 2020. Single-deckers that weigh less than 7.5 tonnes must conform even earlier: 1 January 2015.

No more step-entrance buses without wheelchair provision.

With this in mind, there are one or two scenarios that one could envisage on the eve of each respective deadline. By 31 December 2015, the worth of a Dennis Dart SLF will have sky-rocketed as smaller, cash-strapped operators vie for these machines that will ensure they're effectively able to continue trading. The same will be the case for cascaded, seen-better-days Dennis Tridents on 31 December 2016. Come 31 December 2019, never again will you see an un-modified Volvo B10M operating in service in the UK.

Another scenario that *could* be a very real possibility is today's raison d'ĂȘtre: larger bus groups who operate small to moderately-large fleets in areas of the UK that don't see massive financial returns will ensure these fleets remain well below the minimum standards required by 2016/7 and will offer the government an ultimatum: either scrap the forthcoming legislation, or we pull the plug on the entire operation here, effectively defaulting on their businesses.

Considering the operational sprawl of each of the 'big five', we can immediately identify operating companies therein that have already been passed over in favour of more cash-rich urban subsidiaries. What would the government do if, say, faced with Stagecoach refusing to make Orkney and Shetland conform, or First threatening to close down its Devon & Cornwall operation if the DfT's low-floor crusade isn't re-thought? Unlike when National Express defaulted on its East Coast franchise, the DfT has far less obligation to step in itself. Could we conceivably see renationalised bus companies? Would the legislation be dropped, delayed/prolonged or modified to afford certain operators more time to comply?

And if the 'big five' are given, say, five more years to conform, why shouldn't a small, family independent with a much lower profit margin be given the same opportunity?

Many in the industry are hoping that the current recession will see the brakes applied to the legislation, though there are no real signs that the DfT is thinking along the same lines. Production lines at UK-based manufacturers have never been more sparse, so where are the low-floor vehicles going to come from? Smaller operators will obviously favour second-hand examples, cascaded from larger companies, but if, in turn, these operators are buying fewer vehicles, what will oust their ageing SLFs?

There are so many potential problems and outcomes surrounding the 2016/7 accessibility legislation that it isn't clear at all what will happen. The rumour we've detailed could have been perpetuated by certain operators to at least make the DfT take stock of the impact in just over half-a-decade's time. We still maintain the cost of a 10-year old Scania OmniCity will shoot up in 2014, as too will a Volvo B9TL the following year, as many operators who are resentfully purchasing conforming vehicle types scrummage with others for the best deal for limited supplies in the market place.


Anonymous said...

what a strange blog, the way it is worded implies that most buses are currently step entrance, which i think is far from the case, first devon and cornwall has 94% low floor in the south devon area, the only time you'll see a vario is the training bus they have, this act has been a long time coming and i welcome it, firms large and small have had plently of time to budget and aquire the low floor buses,western greyhound in cornwall a small operator but well known for its use of vario's has quickly aquired low floor buses in the last couple of years (although i think stagecoach has an imput here)

LEYTR said...

We can but hope this is the case.

Another rumour doing the rounds is that First would be more than willing to talk seriously to a third party willing to make an offer for its peripheral subsidiaries.

The purpose of this entry is to consider the implications of the 'big five' effectively refusing to continue operating their subsidiaries that are a long way off conforming to the ensuing legislation.

For many, the costs involved in upgrading Olympians for Tridents etc on such a large scale represents a greater level of investment needed than would be lost with the complete sale.