Higher fuel and staff costs hit bus operators’ profits

05 December 2007

Bus operator profit levels have dropped for the seventh time in eight years, despite growing revenues, more passengers and increased public spending, according to latest figures from the Bus Industry Monitor.

Rising fuel costs, congestion, increased wages and larger pension contributions have been raised as possible explanations for the drop. Pre-tax profit levels in 2005/06 fell back to 6.6% from 7.2% despite an 8% rise in revenue, due to a 9% increase in operating costs.

‘This is the seventh fall in eight years,’ said Chris Cheek, from TAS Consultants, which published the report. ‘And if current trends continue, the industry will go into the red in the foreseeable future.’ Profits were worst hit in shire counties and Wales, where they sank to just 3%, London was the only area to see a rise in profits.

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Higher fuel and staff costs hit bus operators’ profits

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