The UK’s economic woes have become a “catalyst” for the modal shift to coach and bus travel, according to National Express.
Chief executive Ignacio Garat told City A.M. that coach and bus travel has “proven to be the most efficient” way to get around the country.
“It is the most cost effective mode of transport that we have,” Garat said. “It is a way to connect the UK.”
The remarks come as the transport powerhouse posted a 33 per cent increase in revenue year-on-year, fuelled by sustained growth in the UK and Spanish markets.
In the three months ended 30 September, UK revenue went up 30 per cent, with occupancy increasing to 78 per cent – eight percentage points ahead of 2019 levels.
Average ticket price was up 21 per cent on pre-pandemic levels as National Express provided more services during the strikes as well as for the Queen’s funeral.
“We are well positioned for the current inflationary environment with long-term supply contracts, fuel hedging, and a proven ability to pass through price increases over time,” Garat commented earlier today.
National Express has in fact inflation protection from fuel hedges for the whole of 2023 and half of 2024, while 80 per cent of its debt is at fixed interest rates.
Over the last few months, the company has stepped up a gear, posting positive results.
In the six months ended 30 June, National Express brought in £1.3bn in revenue, a 34 per cent increase on last year and the highest in a decade as it secured 16 new contracts in the period.
This is part of the operator’s growth strategy Evolve, which aims to become the world’s most reliable coach and bus service.
What was not needed to drive growth and profitability was the merger with Stagecoach, Garat said.
National Express made the headlines earlier this year when its £445m takeover proposal made to rival Stagecoach was snubbed in favour of asset manager DWS’s £594.9m.
“[The takeover] was never part of our Evolve strategy, it would have been an exceptional accelerator because of the synergies that together we could produce,” the chief executive explained.
“But let’s make it very clear, we don’t need [Stagecoach] to deliver our growth strategy.”