National Express plan Intercity Services & €30 million investment

Jamie2k9

https://www.irishtimes.com/business/2022/08/01/national-express-plans-30m-expansion/

Bus company National Express plans to spend €30 million on expanding its Irish fleet and hiring more workers over the next five years.

The UK company employs 60 people running the Dublin Express service between the capital’s airport and city centre, in which it has invested €5 million to date.

National Express said on Monday that it intends spending €30 million on buying up to 50 new buses for its Irish business over the next five years.

The company plans to boost its existing operations in Dublin and begin running intercity services in the Republic.

It will increase its current fleet of 14 buses to 20 by the end of the year and hire a further 40 workers in 2023.

devnull

I can tell you for certain that National Express Ireland does not employ anything like 60 people directly and it doesn't own the vehicles that operate the services either, despite what the article suggests. I know the ground staff at the airport are employed by National Express directly however.

The drivers and vehicles are supplied by Bernard Kavanagh Group and the MD performs his role in addition to his role as commercial director of the wider National Express coach operation. Some of the other functions of that company in Ireland are performed by staff who are working in the UK rather than having a dedicated FTE in Ireland. That's different to Aircoach for instance who employ the vast majority of their staff directly with a dedicated local management team.

Anyway, leaving all that behind, I think the statements that have been made by National Express is basically the start of a process of looking to acquire other operators and also sends a strong message to Aircoach. They are literally putting their cards on the table that they are going to be sticking around and have deep pockets and they are not going to be going anywhere soon and are hoping that that may make some of the other operators in the industry think about whether now is a good time to sell up.

They are not going to get licenses for most of the major intercity routes to expand their services in most cases because most of them have already been taken, so their best hope is to grow through acquisitions. Obviously Aircoach and Dublin Coach are obvious targets there. I would have said CityLink as well, but since they've bought up GoBus, I doubt they're actively looking to sell. However, if Bus Eireann Expressway ever came on the market, I could see that being attractive to NX. Those parties have worked together before.

All of the stuff about the next five to eight years that they go on about is pretty aspirational and sounds positive, but a lot can happen in that time, including a change of Government which looks likely to be far less friendly to commercial operators than the current one has. It makes for good PR, but ultimately nobody can predict with a level of certainty what is going to happen in the industry in next 5 to 8 years.

L1011

Expressway sale has to be on the table I'd think. Gone from being the cash cow of the company, to something marginal that gets minimal support in a crisis where the other elements of the business get a lot more.

Presumably there should be a Dublin-Galway express licence available after the merger; and NX might be willing to try some more marginal semi-express routes that would be similar to what they do in the UK and are not quite served here. Look at how Wexford Bus do on the N11 corridor and apply to another route maybe.

devnull

The Galway Express service is interesting because there's quite a lot of speculation about that in the industry right now. As it stands both of the Galway express licenses continue to owned and operated by two different companies. From what I hear the Aircoach service is losing money as it's a half way-house in a market dominated by CityLink, similar to the semi-express services you talk about National Express operating in the UK.

I'm not sure what powers the NTA have in terms of that situation, because the CCPC view Aircoach as a direct competitor whereas NTA licensing doesn't. Meanwhile recent timetabling moves by GoBus/CityLink to increase the number of services to the levels they are don't exactly make it an attractive to a new entrant. I would consider there to be significant barriers to entry on that corridor now. as CityLink have a tighter grip on that corridor than any other operator on any other corridor.

Expressway would certainly be a good fit in terms of network. Yes it's got it's problems, but it will be an excellent base to build from to add the semi-express routes you talk about. I'm not sure that the unions would be up for it though and obviously the operating model of Expressway is much different from the one that National Express would be more familiar with.

There's obvious reasons for them to go after Dublin Coach as well because of the fact they' got the largest network of the independent longer distance operators, which could be so much better if it was run with a bit more TLC and higher levels of customer service. Aircoach could well be another target although it would create issues on the Dublin Airport Express market, which could potentially allow Dublin Bus back in as part of a remedy. I can't see JJ Kavanagh being a fit.

L1011

If small acquisitions were on the horizon, McGinley or Feda's distance businesses could be of interest. But I would expect them to want to get substantial coverage quickly by acquisition or new routes

bk

Interesting, Citylink also said the GoBus purchase was only the start of their expansion, so I’d assume they aren’t going anywhere.

Perhaps a good time for Dublin Coach to put themselves up for sale, might get a good price if a bidding war was to break out between NX, Citylink and perhaps even Aircoach.