Fuel is a major cost for any bus or coach company, and the ever-increasing fuel price has tightened margins for operators worldwide. This has also led manufacturers to innovate, resulting in more fuel-efficient buses and coaches in many countries. At the same time, government authorities are facing pressure to reduce their expenditure with obvious impacts on bus and coach operators’ income. Subsidies for bus operators in many cities are reducing.
To improve margins, the priority for many operators worldwide is to improve cost efficiency. Operators are also reviewing their fares structure to try to maximise revenue.
Regulation and ownership of the industry is changing. Squeezed public sector budgets are leading to the sale of state-owned bus and coach companies. Deregulation is also accelerating. In countries where bus and coach services have been privatised and deregulated, similar developments have taken place in the market. These typically include more competitive pricing, prioritisation of resources on the most highly used routes and, in some cases, an increase in niche operators.
The global economic downturn presents an opportunity for operators. Increasing fuel prices are leading people to opt for public transport as a cheaper alternative to the car. Technology and modern information systems are playing a crucial role in helping to inform passengers of their transport choices. As urbanisation continues to grow, many governments are recognising the importance of the bus in reducing traffic congestion.
KPMG’s global transport practice offers a wide range of services to public and private sector bus and coach operators. KPMG member firms provide advice to companies across the sector from long established, global brand names through to start up operators. Our partners and staff understand the different markets and the impact of local requirements, such as regulatory frameworks, local demand patterns and infrastructure capacity.