Comment on the challenges facing the Bus and Coach industry

When the Covid crisis comes to an end, full jets will not just turn up at Dublin and Shannon Airports with tourists ready to tour around, there will likely be a time lapse between the first visitor arriving and the industry reaching full capacity, it is also likely that the same time lag will happen in all sectors, sport, school travel and private hire.

We continuously hear from state agencies that once the pandemic is over the economy will take off and business will return to normal. While these comments are re-assuring, can you believe them? I don’t think anybody is purposely mis-leading in their comments, nonetheless there is limited science to back up these comments. Remember the boom of the early noughties. The real catch phrase was “soft landing”. Unfortunately most people bought into that concept, including the establishment. My memory of the time was there was even a smugness developed in the way some people were talking about the impending slowdown that was likely to follow. People and business were saying that “of course we know trade is cyclical and a slowdown will come”.

It is also my memory of the time that when we stopped talking about the prices of houses we started talking about how well prepared we were for this slowdown that was coming, some peoples comments suggested they were actually looking forward to it. It would be good for business they said, weed out the cowboys. Well it came, in a big way, not very soft, as I remember it. People and business throughout Ireland and the world were destroyed. It is also worth remembering that many people who had remembered the previous recessions, the 1980’s and the oil crisis of the 1970’s were sucked in by the Celtic tiger boom, a lot of people could spend hours debating the pros and cons of how the Celtic tiger was “recession proof” Some of the arguments were very plausible. We all know what happened though, when the music stopped, there weren’t enough chairs to go around. The soft landing became a crash landing for many. How many people have you spoken to since that time, wished they had done things a little differently? Sometimes the mirror in the bathroom is as far as you have to go to meet that person. Remember you don’t have to be the cause of a downturn or recession to be a victim of it.

Using economic history as a backdrop, how is the economy likely to recover from the present economic crisis we find ourselves in? Some people get annoyed when you refer to what we are going through now as a recession. It really does not matter what you call it, nor does it matter who or what caused it, economic activity is reduced significantly, that’s a recession. One of the problems of a recession is that it is hard to identify the starting and finishing line, it will be different for everyone. These dates are often hard to identify. In the last recession our business started to improve and come back on its feet in 2012, unfortunately we could not identify that until early 2014, as we looked back. I suspect this was the case with many others, it will likely be the same this time.

Some companies have not been as severely impacted as others during Covid 19, the Government help is easing the pain. Some engagement from the bank and creditors is helping with keeping things at bay. As cash reserves in companies are dwindling, many wonder how long until that source dries up . One certainty is that when the day comes and the perception of the crisis being over arrives, grant aid and funding will reduce dramatically as the Government will want to get their own house in order.

Enough of doom and gloom

One fact is that good and well run companies generally survive recessions. Prudence, planning, being prepared to change work practices will be the key to re-establishing your business and surviving. Individually some tough decisions may have to be made in your own operation. Operators should never under estimate the support of trade associations like the CTTC. Governments feel confident talking to trade associations. Recent changes in the structures of the CTTC are timely and will be pivotal in giving a collective voice to the Bus and Coach industry, one of the most impacted sectors in the current crisis, a message that needs to be delivered to every politician at local and national level. I said earlier that when it look like the crisis is ending, the funding may start to disappear, it will be the job of the CTTC, with the backing and support of its members to push that date as far out as possible.

In an article published in this e-zine the operating company that runs Kylemore Abbey in Connemara present some sobering predictions. They say that by 2022 their wish is that numbers visiting the site will be 60% of the 2019 levels. I am sure that whatever matrix used here to calculate these numbers is robust and may be a good indication of what faces others. If this is a true reflection of the speed inbound tourism will return, then the requirement for tour coaches will be reduced for a while. In the same interview, Kylemore Abbey outline the strategy they are proposing to get themselves back in the game. As a side comment it is more positive that the mutterings we heard from the “Cliffs of Moher” they are saying that part of their strategy is to increase costs, possibly they will review that and likely we will hear more about that story in the future.

One part of the passenger transport business that may recover faster, – City, Town & Scheduled services. Deliveries and production of new Coaches has all but stopped, however across Europe city buses continue to be manufactured, replaced and delivered. Here the NTA here are ready to procure and place a substantial order for the coming years. It may be an area that many operators did not consider in the past, but now may be the time to re-consider. Many regions of the country are badly served in terms of frequency and connectivity. It is difficult to be sure how fast people will have confidence to travel again, be it on holidays or to matches, these are the unknowns. A fast and efficient role out of the vaccine is critical though.

Finally here is a thought

Those of you registered on the business social media platform, LinkedIn, may have noticed a post from Airline pilot, Neal Petrie. In it there are two pictures of Neal, first, in his role as an A380 captain with Emirates Airlines, he is pictured at the controls of the jet. In the second picture he is seen standing beside an 18 tonne DAF truck as he prepares to go delivering, with the caption, “Life can throw some curveballs, but for me it is great to feel useful again, thank God for my HGV licence”.

Many people may have to make changes and adjustments, hopefully only short term. Let’s hope, like Neal, they are wise enough to make the sensible decision.

Sean Murtagh – sean@fleet.ie