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Revitalising the Transportation Market in North America

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Revitalising the Transportation Market in North America REVITALISING THE TRANSPORTATION MARKET IN NORTH AMERICA January 2015 Contents 2 At a glance 3 Stagecoach Group in North America 3 Safer, greener and smarter travel 3 Motorcoach travel in North America 4 Refocusing the business 4 Revitalising inter-city bus travel 6 megabus.com: making connections across North America 7 Businesses factfiles 1 Stagecoach Group At a glance Our business in North America $ Buses and Annual Turnover Employees coaches mileage United States $601m 4,370 2,140 125.4m Canada $85m 500 290 20.6m Total $686m 4,870 2,430 146m Refocusing the business Revenue Revenue by sector by sector 2005-2006 2013-2014 Charter/tour/casino 42% Scheduled services/transit 35% Scheduled services/transit 39% megabus.com 26% Contracts 12% Charter/tour/casino 24% School bus 7% Contracts 14% megabus.com <1% School bus 1% Motorcoach market in United States and Canada Passenger Passenger Carriers Vehicles Employees journeys miles United States 3,623 35,354 – – – Canada 331 4,253 – – – Total 3,954 39,607 132,900 637.4m 75.7b 2 Overview Stagecoach Group in North America Training is at the heart of our approach. Our driving team is one of the best trained in the industry. We have a dedicated Stagecoach Group is one of the world’s largest bus, coach, centralised driver training school in Elizabeth, New Jersey, and tram and rail groups, with major operations in the United new drivers undergo a minimum of 150 hours of classroom Kingdom, mainland Europe and North America. and behind-the-wheel training before they start in service. We have had a major presence in North America for around Even those with an existing commercial driver’s license are 15 years, providing critical local and inter-city transport required to complete more than 90 hours of theory and services for communities throughout the US and Canada. practical training. Our business owns more than 25 bus carriers in North All drivers passing through the training school undergo the America that operate scheduled bus routes, motorcoach same training regardless of the vehicle they will ultimately tours, charters, and/or city sightseeing tours. drive and we use state-of-the-art in-vehicle technology These local carriers are each independently managed and across our fleet. Even after drivers have qualified, we have have a deep knowledge of their communities and customers dedicated retraining programmes to ensure our high built up over many decades, with some having been standards are maintained. operating for more than 75 years. Across our operations, we are promoting the environmental Our three key brands – Coach USA, Coach Canada and advantages of public transportation and aiming to make megabus.com – collectively operate across more than our business more sustainable. We have reduced the carbon intensity of our business (CO compared with turnover) by 40 states in the US and two provinces in Canada. 2 37% in the United States and by 26% in Canada over the past We are one of the largest transportation operators in four years. North America, operating more than 2,400 buses and coaches and employing close to 5,000 people. This has been achieved through programmes focused on improving energy efficiency at our facilities; reducing carbon megabus.com – our express bus service – provides safe, emissions from our fleet and helping our customers achieve affordable and environmentally friendly intercity travel, greener transportation services. Our megabus.com inter-city connecting around 130 cities across North America. bus service has been recognised as the greenest operator in the bus industry by the United Motorcoach Association. Safer, greener and smarter travel Safety is our absolute No.1 priority. We have invested Motorcoach travel in North America millions of dollars in new state-of-the-art motorcoaches, The motorcoach market in North America is highly fragmented. which include seat belts for all passengers, automatic traction There are more than 3,600 motorcoach carriers in the United control, electronic stability control, lane-changing warning States operating 35,000 vehicles. In Canada, more than 300 devices for buses, and GPS systems. Our team of experts can carriers run more than 4,000 motorcoaches. monitor safety critical features from our 24/7 control facility. The industry in North America employs around 133,000 Each of our operating companies holds the U.S. Department people and is a significant sector of the economy in its own of Transportation’s highest safety rating and each has right. In addition, the motorcoach industry supports supply stringent driver training and preventative maintenance chain jobs, helps connect people with work, education, programmes to ensure full operational and legal compliance. healthcare and leisure, as well as bringing vital tourism Our employees are subject to random drug and alcohol income to regions across North America. testing consistent with federal requirements as well as Passengers made 637 million trips by motorcoach in 2012, periodic safety refresher classes. We have stricter driver an increase of more than 10 million journeys on the previous hours of service rules than those required by federal year. Motorcoaches are used by a mix of people, with regulation and have also invested in a hi-tech driver students and senior citizens each accounting for around safety alert system known as Nap Zapper. 25% of customers. 3 Stagecoach Group Refocusing the business Revitalising inter-city bus travel Stagecoach Group’s initial significant entry into the public Inter-city bus use in North America has been transformed transport market in North America was with the £1.2 billion in recent years. Decades of decline have been replaced by acquisition of Coach USA in 1999. The business was involved consistent annual growth. The catalyst for this transformation in multiple market sectors, with a significant proportion in public transportation has been Stagecoach Group’s of the operations involving leisure-based tour and charter megabus.com travel brand. It has literally changed the services, as well as a major taxi business, contract operations way people travel – from booking to departure to on and school bus services. The business also had a wide board to arrival. geographic base, with diverse operations across most states across the United States. Trends in inter-city bus use The North America business was restructured in 2003 with a number of divestments which reduced the size of the Percentage change in annual passenger volumes business and its market segments. This allowed the business to focus more closely on the Group’s key strengths in running 9.8% point to point commuter and inter-city services, with a core 10% presence in the North-East and Mid-West of the United 6.9% 7.1% States. Millions of customers use our commuter coach 6.0% services, which include those operating from New York State 5.1% and the State of New Jersey to and from New York City. 5% Many routes serve park and ride locations. 1960 - 1980 - 2002 - In 2006, we brought our inter-city express brand megabus.com 1980 2002 2006 0% 2006 2008 2009 2010 2011 to North America. The acquisition of a number of former -2007 -1.4% Coach America operations in 2012 provided a base to further -1.8% grow the brand and expand to the West Coast and southern regions of the United States. At the same time, we continue -5% to undertake contract work on behalf of public/private sector clients, including city and state transit authorities, and shuttles -8.0% for company employees and college/university students. -10% Source: De Paul University’s Chaddick Institute for Metropolitan Development, 2012. 4 We launched the brand in North America in 2006 after huge success in the UK in establishing a new market for Average fare by transport mode* budget, high quality inter-city coach travel. Booking is via an easy-to-use website, with flexible yield managed fares from just $1. Prices vary according to time of booking and $160 $145.23 travel and our product uses higher capacity vehicles than $140 traditional coaches to keep costs per passenger and fares low. $120 Detailed research by De Paul University’s Chaddick Institute $100 $80 for Metropolitan Development in Chicago has identified the $64.19 “megabus effect”, highlighting how the brand has kick- $60 $49.44 started a new era and growing market for bus travel. It has $40 $30.53 grown the overall market for inter-city bus travel, resulting $20 in lower travel costs for consumers, the emergence of new $0 low-cost bus operators, hundreds of new jobs, as well as Intercity Bus Intercity Train boosting tourism and the wider economy. Driving Airline City to city bus transportation is the fastest-growing and most affordable transportation mode, with the number *Based on analysis of 54 city to city routes which included representation of operations nearly doubling between 2010 and 2013. from each of the 50 largest metropolitan areas on the US mainland. Consumers have benefitted from this innovation, with lower Source: De Paul University’s Chaddick Institute for prices and more customer-focused services. An independent Metropolitan Development, 2014. De Paul University study in 2014 found that city to city bus services cumulatively saves American consumers $1.1 billion a year compared to travelling by other modes, including rail and airlines. The research also found that, in all regions of Total daily discount city-to-city bus operations the United States, motorcoach travel is substantially less expensive than single-occupant driving, even for motorists who consider only the cost of fuel and tolls and ignore 1200 1,014 depreciation on the value of their car. 975 1000 There has also been a significant growth in daily low-cost 800 748 inter-city bus services in recent years, nearly doubling from 589 around 590 a day in 2010 to more than 1,000 in 2013.
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