UK coach sector faces crisis without government intervention

More than 1,000 family-run coach businesses are being forced into bankruptcy in the UK as their vehicles get repossessed owing to the climate created by the ongoing coronavirus pandemic, according to a report from their trade body.

Since March, 100 of these businesses have gone into administration and many more are on the brink as demand for their services has wavered in the intervening months.

The body predicts that as many as 24,000 people who work in the sector could be unemployed by April 2021 if government intervention is not provided.

Unfortunately, UK chancellor Rishi Sunak's new government support scheme for furloughed workers is not of much use to the coach industry, as it requires both businesses and the state to top up worker's wages at a third of their normal rate, which would only affect those driving school buses, which Graham Vidler, chief executive of the Confederation of Passenger Transport only accounts for 15-20% of the entire sector's workload.

Operators that rely on international and domestic tourism - a sector that has lain all but dormant since the onset of the pandemic - are unlikely to have enough work to be covered by the scheme.

Mr Vidler told the FT that as much 80% of the industry is smaller, family-run businesses who work alongside bigger companies like Stagecoach. Unlike the bus services, who run on strict schedules, the coach sector has received little-to-no government support.

To this end, 550 coach operators wrote to the chancellor back in Jue to request a roughly £65 million (€71.6 million) stimulus to help them cope with seeing out 2020 with the significant reduction to business.

In response, the Treasury pointed them to existing schemes.

In a statement, they said:  “Businesses across all sectors — including the coach industry — have had access to our generous and wide-ranging package of support. We’ve also introduced a package of other support measures, including bounce back loans, tax deferrals, business rates holidays and more than £10bn of grants.”

Only 15% of the industry is able to take advantage of these grants, while the rest who apply are considered unviable, according to Mr Vidler, who added that - while many coach operators work with both domestic and international tourism - they are not considered part of the leisure industry and therefore unable to apply for the government grants that cover that sector.

In August, the Department for Education granted £40 million (€44 million) to local authorities to procure extra vehicles to allow them to properly adhere to social distancing policies on public transport for the reopening of schools. However, many operators have noted they have been overlooked by the scheme, and the money earned from the school has not been sufficient to prop up the industry.

With no way of gaining enough funds to keep their businesses afloat, many of the businesses say they face disaster. Individual finance holidays with investors are said to expire at the end on October, leaving some coach companies with expensive loans to repay.

Candice Mason, owner of Masons Coaches in Tring, Hertfordshire, told the FT that she had borrowed £1.3m in the past three years to ensure her fleet of coaches met new environmental and accessibility standards.

Due to falling business, she estimates she needs to make up £180,000 next years in order to keep her business afloat.

She added: “We have coaches that were valued at £170,000 last year that are now worth £50,000. If we go under, I will have to make up the difference myself with the finance company.” With the public wary of taking coaches, despite companies ensuring that vehicles meet new hygiene standards, with regular scrubdowns and capacity limited to about 50 per cent, many say they cannot survive.

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