SCOTTISH transport giants Stagecoach and FirstGroup have flagged the impact on their businesses of the collapse in passenger numbers amid the coronavirus crisis.
Perth-based Stagecoach warned it will no longer meet profit expectations because of the extent of the unfolding crisis. It said it expects to maintain a significant proportion of its income during the downturn, based on existing contractual arrangements and discussions with government bodies.
Directors are taking a 50 per cent salary and fee cut “for a period of time”, will not receive any bonuses for 2019/21, and will not receive a pay increase for 2020/21. It is still too early to reliably predict the effect the outbreak might have on profit, it said, but warned shareholders any further dividends are unlikely this year.
Aberdeen-based FirstGroup reported that it has seen “substantial volume reductions in our passenger demand businesses in North America and the UK”. It said it is no longer in a position to provide guidance on the outturn for the remainder of the financial year to March 31.
The statements came as the UK Government announced rail franchise agreements will be suspended for at least six months to ensure train companies do not collapse.
The Department for Transport said operators will be able to transfer all the revenue and cost risks to Government in return for a small management fee as trains moved to a reduced timetable during the pandemic.
Stagecoach said: “We welcome the Government’s significant support package for workers and businesses impacted by the current situation, as well as specific measures providing flexibility for public transport operators.
“We are studying the detail of how these initiatives will apply to our business and be implemented. In addition, we are continuing to engage with government and local authorities on other targeted measures which will protect sector jobs and the long-term health of public transport.“
It said concessionary travel, which accounts for a third of all its bus journeys, was down by 50% as a result of coronavirus. Martin Griffiths, Stagecoach chief executive, said: “We are all facing an unprecedented challenge at this time and the impact is being felt by our business and employees as with many others.
“Importantly, we have good liquidity and are taking the right, decisive actions to help mitigate as much of the impact of the current situation as we can. We are also working hard with our industry partners, government and local authorities on measures to protect public transport for the long-term.
“Our bus, coach and tram services are hugely important to our country’s economy and communities, even more so at this time. I would like to thank our people and other critical sector workers for the important role they are playing in the national effort to get through this difficult period.”
FirstGroup said that “in recent days the group has seen unprecedented changes in the market environments for all its businesses”.
Matthew Gregory, FirstGroup chief executive, said it has “significant liquidity and a diverse portfolio of leading transportation assets”, and added: “Currently, the situation is changing day by day, and accordingly we are fully utilising all levers at our disposal to ensure the most effective management of our cost base through this intense period of uncertainty.”