Stagecoach furloughs staff as government bails out bus firms
Stagecoach has furloughed more than half of its regional bus staff after bus sales plunged amid the coronavirus lockdown.
With commercial sales at local regional bus companies at around 15 per cent of “normal” levels, Stagecoach has already furloughed around 55 per cent of its bus drivers and engineering staff.
Stagecoach’s update came as the government revealed a £167m fund to bail out bus companies.
The Department for Transport has confirmed up to £14m per week of additional funding for bus operators during this period. Similarly the Scottish government has confirmed it will maintain payments of concessionary revenue and the bus services operators grant (BSOG) at pre-coronavirus levels.
Government bailout ‘reduces risk from losses’
Stagecoach said “the measures announced reduce the risk of substantial ongoing operating losses.”
However, the bus operator said it remains difficult to reliably forecast the effects of coronavirus on its regional bus income.
Sign up to Morning Wire’s Midday Update newsletter, delivered to your inbox every lunchtime
“Taking account of the government support confirmed, we do not expect the regional bus business to earn a profit for the time being and for the weeks ahead,” Stagecoach added.
The bus operator is reducing weekly vehicle mileage by around 60 per cent of normal levels. Furloughed staff “will be paid the lower of 80 per cent of their reference pay and £2,500 per month.”
The firm will also temporarily suspended all Megabus services in England and Wales from Sunday.
The firm said it was helping with the national effort to deal with the coronavirus crisis. That includes providing transport service for NHS staff in Inverness.
Stagecoach said it has around £506m of available cash and undrawn, committed bank facilities. It has reduced its previously planned 2020/2021 capital expenditure which will be limited to £40m of cash capital expenditure and £20m of new leases.
Shares were up 1.13 per cent this morning.
Get the news as it happens by following Morning Wire on Twitter.