PERTH, Scotland – For the third consecutive year, Coach USA/Coach Canada and megabus.com have posted reduced revenue and operating profit.
All but one of the five business lines at Coach USA/Coach Canada and sister operation megabus.com had lower revenue for the fiscal year ended April 29.
Coach USA/Coach Canada, along with megabus.com, is the largest operator of motorcoaches in North America, with a fleet of roughly 2,300 buses. (No. 2 Greyhound Lines has a fleet of 1,600 coaches.)
During fiscal 2017, combined revenue at Coach USA/Coach Canada and megabus fell to $632.3 million from $647.7 million in fiscal 2016, a dip of 2.4 percent. Fiscal 2015 revenue was $680.1 million and revenue in fiscal 2014 was $685.7 million.
Operating profit for Coach USA/Coach Canada and megabus slid by 12 percent during the 12 months ended April 29, to $25 million from $28.4 million in fiscal 2016. Operating profit in fiscal 2015 was $35.4 million and in fiscal 2014 it reached $38 million. Overall, operating profit is down one-third in the past three years.
In fiscal 2017, revenue at megabus was down 4.9 percent; commercial scheduled service saw revenue slip by just under 1 percent; charter service revenue declined 2.2 percent; and sightseeing and tour business reported a 14.7 percent plunge in sales.
The lone bright spot was contract services, which posted a 2.6 percent revenue gain.
“The market in North America has been challenging in recent years due to the effects of sustained lower fuel prices, which have heightened car and air competition,” said Stagecoach Group, the Perth-based corporate parent of Coach USA/Coach Canada and megabus, in releasing the fiscal 2017 results.
“However,” Stagecoach noted, ridership on megabus.com shows “some signs of improvement (with the rate of revenue decline further moderating and revenue per mile for the year up 3.2 percent).”
Stagecoach said its North American management had taken action to match services with changes in demand, including reducing mileage operated by megabus, and “making targeted use of smaller vehicles,” meaning fewer of megabus’ signature double-deckers on the road.
In a nutshell, business at Coach USA/Coach Canada “remains in line with . . . expectations,” said Stagecoach, with revenue from the more leisure-dependent activities falling off during the year. At the same time, the company “saw better trends in our scheduled service and contract revenues.”
The decline in revenue from sightseeing and tours largely reflected reductions in mileage at Coach USA sightseeing operations in California.
The growth in contract revenue included new business, and “we are currently in discussions regarding several further opportunities to secure new contract business,” Stagecoach said.
The North America division also is expanding its digital initiatives.
“As well as offering a link to buy travel on some of our current commuter services to and from New York City, our new www.commuterwiz.com website also allows commuters to provide us with details of their commutes to enable us to develop new services for journeys not already well served by public transport,” the company said.
“Our airport express services have increased their online sales significantly following the launch of more mobile-friendly websites.”
Stagecoach said it sees growth opportunities for its North American unit in new contract wins “but will remain disciplined in ensuring that our contract bids are designed to deliver a satisfactory rate of return on capital.”
“Given the actions we have taken to match our services with customer demand, and new contract opportunities, we are targeting growth in the division’s operating profit in 2017/18,” the company said.
