A year ago today, Premiere travel ceased trading. They had
ran out of money and without any buyer coming forward, the company had no
choice but to close. It drew a close to ten
years of the ‘marmite’ company that was famed for its “fare fairs” and
competition along corridors served by Trent Barton.
The Red9 was one of Premiere's more successful ventures
Premiere’s collapse wasn’t exactly a shock, but at the same
time it was a little unexpected and happened very quickly. There were
mutterings of it happening on the Sunday and by the Friday the yard gates were
locked. It goes to show that it is practically impossible to know the exact
financial position of a company, or indeed how well they are performing.
The Redflyer, however incurred huge losses
Since Premiere’s demise, we have seen two other firms in the
East Midlands succumb to economic problems. Both K&H Doyle and Gills were smaller
than Premiere but all three relied heavily on work part funded by local
authorities. All three are testament to the fact that this work will not
guarantee long term survival, in a time of massive cuts to public funding,
these contracts cannot prop up risky commercial ventures, as within time,
cracks will start to show. Premiere also operated services on behalf of the
University of Nottingham and National Express which shows that the margins on
this work will be tiny and not enough to keep a business going indefinitely.
Premiere operated routes on behalf of National Express, but they didn't have a portfolio anywhere near the size of Yourbus'
Premiere tried a large number of routes linking Nottingham
with various Trent Barton strongholds with varying degrees of success. The Red1
to Bingham was popular due to it providing a direct link to Radcliffe from
Nottingham, rather than going via West Bridgeford. Trent Barton struggled for
capacity at Premiere’s collapse and the same was true for Skylink, with the
Red5 being reasonably popular. Less success was found in Stapleford and
Cotgrave, not helped by Midland General’s bargain bus. Similarly ill-fated was
the Red Flyer which was withdrawn after reportedly making losses of £1,000 a
week. This on a route that required only two buses.
Since the loss of Premiere, Gill's travel has also gone under...
It was before Premiere’s collapse that we learned of Yourbus’
plans to run their Citylink service. Often branded as the “posh premiere,” their
tactics and methods do seem familiar, building up a portfolio of contract work
and attempting a number of commercial routes in competition with established operators.
There are, however two key differences which could place Yourbus at even more
of a disadvantage.
...as has K&H Doyle
Firstly is the large amount of dead mileage that Yourbus’
fleet travels on a daily basis. With the exception of the Y1 Y3 and 138, all
Yourbus routes start in towns some distance from their Heanor base. At least one
bus even travels empty from Ashbourne to Heanor every evening, a 40 minute, 20
mile trip. In contrast, most of Premiere’s routes started or finished in
Nottingham, a mile or two from their depot or were interworked with routes that
did, the 228 was ran off the back of the Red8, for example. This adds a massive
sum to Yourbus’ fuel bill but also the wages bill. It is a little difficult to
comprehend how this can be sustainable, particularly when many of the
contracted journeys were won off established operators who would have had a
good understanding of the pricing for the tenders. Even more so when you
consider that a reasonable amount were taken off K&H Doyle who have
themselves been forced to shut.
Premiere certainly didn't have the most attractive fleet!
Secondly, Premiere’s fleet may have looked terrible, it was
certainly economical. It was a mishmash of
buses many of which could have done with a bit of TLC, but buses were no doubt
bought at good value prices. In contrast, runs a very modern fleet, with bought-from-new
Mercedes Benz Citaros for the commercial services and Wright Streetlites making
up the backbone of the contracted fleet. These will no doubt come at a cost
before considering depreciation. What however works in Yourbus’ favour is that
nice new buses will attract more customers which will make the work more
profitable. Yourbus certainly aren’t the only operator in the county to buy
brand new buses for tendered work either, Hulleys of Baslow regularly add new members
to its fleet so it clearly isn’t that alien an idea.
Y1 is one of a number of routes ran with brand new Citaros, a far cry from the second hand buses Premiere used to compete.
I’m not of course suggesting that Yourbus will be in
administration within days. A quick look on Company Check shows that they retained
a profit of nearly £1.2 million in the financial year ended last February.
However, I do hope that Yourbus don’t live up to their nickname as a “posh
Premiere,” given that people’s livelihoods are always on the line in these type
of situations. Hopefully, Yourbus can continue to place the necessary checks
and balances on the established operators in a sustainable way, or at least
realise any mistakes they are making before it is too late and they too suffer
the same fate the Premiere suffered a year ago today.
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