07 January 2010

Have your cake and eat it

Aberdeen-based First has ruffled the feathers of the Scottish media in recent days, though this is nothing compared to furious bus passengers, by signalling its intention to make numerous cuts to bus services in Scotland - many of which renege its commitment to retain those which compete with ScotRail - Scotland's only wholly-based train operating company, which First also operates.

The cuts being planned fall mainly in the dense urban area of Glasgow - the busiest train station for ScotRail - with evening bus services to Cambuslang and up to nine other routes seeing either reduced frequencies or total withdrawal.

Knowing that this goes against a ruling made by the Office of Fair Trading (OFT) in 2004, which it placed on First following its successful bid to relieve National Express of the ScotRail franchise, First is applying to the OFT to have this regulatory order lifted. If granted, we understand further bus service cuts are likely in Edinburgh and Stirling, too.

LEYTR Comment: Of the OFT's regulatory order, First's Leon Daniels (who has a blog by-the-way) claims that "Nobody party to that agreement would have foreseen the changes to economic circumstances." This is broadly what National Express lamented when it acknowledged it would be unable to sustain the losses made at its National Express East Coast rail franchise. As Transport Secretary Lord Adonis said at the time, commercial operators need to accept the element of risk. First won ScotRail in the 'glory years' of the mid-naughties and with no recession in sight, happily agreed to abide by the OFT order. But, as we mused in November, First's way of handling the recession has been to cut, cut, cut, which has put it in an unenviable position when compared to its contemporaries. First simply has to knuckle down and deal with it. They can't have it their own way all the time. If the OFT said they'd lift the restriction provided First parted with ScotRail, the UK's largest bus company would gleefully resume operation of these supposed loss-making services without a moment's notice. First: you can't have it both ways.

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