Concerns for future of Lothian Buses as company hit with £12m income loss from Covid-19 Ridacard sales slump

Lothian Buses’ future is “more and more fragile” with concerns about its survival beyond the Covid-19 pandemic as restrictions on travel continue to bite the publicly owned bus operator hard.

Lothian Buses are facing a huge financial hit due to Covid-19
Lothian Buses are facing a huge financial hit due to Covid-19

It can now be exclusively revealed that Lothian Buses lost around £12 million in expected income from sales of its bus pass Ridacard when compared to equivalent figures last year.

Sales of 28 day Adult Ridacards slumped from around 25,000 a month to a low of less than 3,000 a month between April and September, costing the bus operator around £8m in lost income.

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The figures, obtained through freedom of information laws, also indicate a loss of around £1.2 million after 28 day student Ridacard sales stalled at just a fifth of 2019’s levels.

Refunds from Ridacard cancellations from the start of the pandemic also cost Lothian around £530,000, five times the total cost of refunds across the entirety of 2019.

These losses add more context to the perilous financial situation facing the bus operator and comes after this newspaper revealed earlier this year that Lothian Buses had been hit with an estimated loss of around £30m from a collapse in passenger numbers caused by Covid-19.

Edinburgh City Council, the majority shareholder, is set to lose £12 million in expected dividends from the company, and passenger levels remain around 60 per cent below normal levels on some routes.

Asked how confident it was it could survive the pandemic, a spokesperson for Lothian Buses said it was too early to understand the full scale of Covid-19’s impact.

They said: “The past 7 months have continued to have a devastating impact on our industry as customer numbers remain low with Lothian customer demand less than half of normal patronage.

"We don’t anticipate that this will change in the short term as Scottish Government introduce new tiered levels of restrictions to protect the most vulnerable in our communities.

“The Scottish Government continue to fund bus services and recently announced a further round of financial support for all bus operators earlier this month, providing additional support into January.

"Like other organisations it is still too soon to forecast the full implications and financial consequences of Covid-19, however as will likely be the case with other commercial businesses, Lothian continue to model a number of scenarios to mitigate financial losses.

"We are grateful to all of our colleagues for their continued loyalty, commitment and dedication and to all of our customers for their patience, during what is an extremely challenging time for everyone.”

Transport convener at the council, Lesley Macinnes, added she “remained confident” the company could survive but admitted it faced “exceptionally challenging times”.

She said: “These are exceptionally challenging times for all public transport operators during the ongoing global pandemic. The Scottish Government is providing funding through Transport Scotland to support operators.

"As a Council, we continue to work closely with Lothian as the public health situation evolves and we remain confident the company will weather the pandemic despite the enormously testing impact the crisis is having.”

Scottish Conservative transport spokesperson Susan Webber said there seemed to be “no end” to Lothian Buses’ financial challenges.

She said: “The financial pressures on what is looking like a more and more fragile Lothian Buses continue.

"I am anxious now for the long-term future of this business. I have no doubt they are resilient, and they can adapt but right now there is no end in sight as lockdown continues.

"The success of Lothian Buses is paramount to the success of our capital city, they are directly linked. Their ability to provide an award-winning public transport network makes us the envy of other cities, as residents we take pride in ‘our’ Lothian Buses and visitors to our city go home raving about them.

“The announcement today of a Tier Three Lockdown for Edinburgh will be another crushing blow as the link between passenger numbers and ongoing restrictions across the hospitality sector has never been in doubt.”

The Liberal Democrat’s spokesperson for transport, Kevin Lang, labelled the bus company’s situation “perilous”.

He said: “These stark and sobering figures underline just how perilous the situation for Lothian Buses has become.

“Lothian is a great company with a proud history. However, it is clear the days of the company being used as a cash cow each year by the Council are well and truly over.

"Every penny of revenue will need to be spent wisely and used to ensure that, whenever this pandemic ends, Edinburgh still has a viable, publicly owned bus company serving all parts of the city”.

The Green’s transport spokesperson, Gavin Corbett, added: “Lothian Buses has been right in the frontline for the devastating impact of COVID-19. The buses have continued to run, which is critical for the city, but of course demand and therefore income is down dramatically.

"At the moment, the city council budget overall plus some additional support from national government, is covering the budget gap but clearly the longer restrictions last the more difficult that becomes.

"There's no doubt that a restored and expanded bus service is needed for the city as part of shifting the balance towards public transport, walking and cycling. So, for now, it's all about supporting those bus services through the most difficult times any of us have seen.

"Without that we'd simply be jumping from the frying pan of COVID to the fire of congestion, air pollution and climate breakdown."

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