Go-Ahead hit by bus plan

Hugo Duncan
3 Sep 2009

Bus and train operator Go-Ahead today said Boris Johnson's decision to scrap bendy buses would cost it £4 million.

The firm, which ran five of the original 12 bendy routes, said the Mayor's flagship policy would cost it £800,000 this year and £4 million over three years.

It owns 58 bendy buses which it is now having to sell second-hand, though it admits it is struggling to find buyers.

Two bendy routes — the 507 and 521 — have already disappeared from London's streets with the other 10 set to go by 2011.

Go-Ahead revealed the losses as it reported a 14.5% fall in profits to £112.1 million in the 12 months to 27 June. Revenues were up 6.7% to £2.35 billion.

Record profits at its bus division of £66.6 million were offset by a slowdown in growth on the train network, which includes the Southern, Southeastern and London Midland rail services as well as Gatwick Express.

Chief executive Keith Ludeman said job losses in London and the City in particular were finally catching up with the rail services.

He also said the Gatwick Express service was under pressure from falling passenger numbers at Gatwick Airport as the recession bites.

Rail profits fell 20% to £61.5 million last year as passenger growth ground to a halt. The firm expects rail profits to be even lower next year, in part hit by cuts to regulated fares linked to the Retail Prices Index inflation benchmark, which is now in negative territory.

During the second half of Go-Ahead's financial year, passenger numbers at commuter line Southeastern fell 1.7%, reflecting a London jobs market hit by recession.