A new phenomena for Busworld Academy, a webinar for the bus and coach sector. In his opening words Jan de Man, Director Busworld Academy, mentioned 390 participants from all over the world joining this webinar. The topic COVID-19 in the bus and coach sector was discussed by Anna Grönlund, Vice President CPT-IRU and deputy managing director of the Swedish Bus and Coach Federation, Peter Pantuso CEO and President at ABA and President of the National Bus Traffic Association (USA) and Prasanna Keshav Patwardhan, President BOCI - Bus & Car Operators Confederation of India. This article is about their contribution to this webinar.
All over the world the measures taken in trying to contain the spreading of the COVID-19 virus are more or less the same. Governments helping businesses by compensating for loss in revenues, helping companies in paying salaries and postponement in paying taxes. The main topics in this webinar discussed were: Economic and financial measures to keep bus & coach operators in business; Measures for keeping bus systems operational; Measures for keeping bus drivers and our staff safe.
Peter Pantuso started the webinar by mentioning the importance of the motorcoach travel and tour industry for the economy of the USA. The year 2018 the revenue of the industry was 15 billion US-dollar and it contributed in total over 100 billion US-dollar. The travel and tourisme industry has an impact of 236.9 billion US-dollar. Around 100.000 people find work in the motorcoach industry, where 1.98 million people are working in travel and tourisme. Interesting are the average spendings from people travelling by motorcoach. During a daytrip 40 people spend between 3,000 and 7,000 US-dollars and when they stay overnight the spendings grow to 15,000 US-dollar or more. Important figures to understand what the impact of a shutdown of the industry has on the economy of the United States of America.
Almost 100 percent of the private commuter businesses have stopped running and these are all small family businesses, of which there are about 3000. They own approximately 16,000 coaches, standing still. Intercity coach operations performed by Greyhound and Megabus are running on a 15 per cent capacity and according to Pantuso the estimation is that the coaches which are still running only carry up to a handful of people. “Charter and tour operation is stopped for 95 per cent, there are still some employee shuttles running but that are only a few. All the iconic event parks are closed like Disney World, Universal Studios and also all the theatres will be closed until the beginning of June. And there is no travelling to all the major cities because of the lock down.”
Impact of COVID-19
Peter Pantuso expects a big impact of the COVID-19 virus on the industry. In terms of money and in a worst case scenario at the end of this year 11 billion US-dollar of the normal 15 billion dollar revenue can be lost. When business resumes after what is to be expected a three month period in which the peak of the pandemic has occurred and slows down again, he still expects a loss of 3.93 billion US-dollar compared with 2018. In terms of jobs he sees an immediate job loss of over 20.000 jobs and when the shutdown lasts 90 days it will amount to even 60.000. “It will not be a V-shaped return to business, we believe it will be a very gradual ramp up. That is what we are telling the people at Capitol Hill – the administration – and the media. We have explained this comparing it with the airlines or other means of transport. (Just recently the Trump administration has agreed for 25 billion US-dollar funding of the airliners - JH). The airlines move per year 700 million people, the motorcoach industry 600 million. We move actually in two weeks more people then our trainsystem Amtrak all year long. We also provide connections to and from the other transportation modes. In regards to funding we should be treated as the other modes of transportation. Unfortunately the administration and congress have not heard this message clear enough, they are tone deaf to our actions and comments.”
Missing the bus
Like every European country the US has also put in place financial packages to support businesses and the economy. Peter Pantuso explains that the first two packages were focussed on getting people back to work with an expanding disaster loan programme for small businesses with no more then 500 employees. Late march a 2 billion dollar programme came available for small businesses and made available through banks. “If you would hire the staff you had in place in January or February and keep them on the pay roll for eight weeks, the loan is forgiven at the end of the two year loan period. Unfortunately the motorcoach industry is somewhat unique and this programme is not really suited for us because a big part of our business for the rest of the year is gone already and we do not expect to get it back. So it is unlikely that we can bring back or keep the staff for the next eight weeks as congress prescribes in this loan-programme. If you can not do this, then the loan will not be turned into a grant but will stay a loan. Adding another loan, debt, when no income is coming in, does not help these companies. You need operational support. We as the industry have told congress: you miss the bus in this, while you did consider other modes of passenger transportation and funded it. But our industry which does not bring any additional cost for the tax payer, is overlooked and left out. To make congress decide in favour of the industry we have started an aggressive lobbying and engagement program focussing Capital Hill. We'll reach out to newspapers in the country to influence the districts of members of congress who are now back home, that they will see they left out the bus industry. Not helping our industry will hit homes in every community.”
Mexico and Brasil
Pantuso shared also some figures from two other countries: Mexico and Brasil. Mexico is according to him hitting phase 2 of the pandemic. “Tourist services are off by 95 per cent, ridership by 80 per cent and as they told me these numbers are growing by the day.” In Brasil there are 2040 buscompanies with 70,000 vehicles in operation. The total number of directs jobs in the bus and coach industry is 350,000 from which 85,000 are drivers. They transport each year around 1.5 billion passenger. Brasil being a big county has a lot of intercity travel, around 85 percent of the total transportation. Due to the COVID-19 virus operations have been shut down for 30 days and that is expanded by another 30 days. “It is bleak picture. Everyone is struggling, but the spirit in the industry is amazing and unlike any other industry. Most of the businesses have survived a lot over the years and they will survive this pandemic and are looking forward to rebuild their businesses and opportunities which will exist in the future. Everything we do is changing, the way we work, travel and interact. This pandemic will have an enormous effect on our lives. To start up operations again we will have to deal with social distancing which means operators only can fill up a quarter of the bus. Especially for commuter services it will ask a lot. The business models will change and perhaps even the design of the buses.”
Unlike the United States of America, Europe consists of different countries with own legislation. Europe is meeting the COVID-19 challenge in different ways, explains Anna Grönlund. In Sweden the coach sector decreased last month by 100 per cent and for 90 per cent in long distance transportation. Scheduled bus traffic has decreased by 50 per cent. Special services such as school buses are not effected yet, because in Sweden Schools and “kindergarten” are not closed down. There are restrictions in how many people may gather. Universities and high schools are closed. The impact of the COVID-19 virus is similar to the US. All over Europe long distance services are stopped and urban transportation has decreased by also 50 per cent and in some places even up to a 100 per cent. In most European countries schools are closed so those special services are also stopped fully. Although in Denmark schools for young children are re-opening partially. Grönlund says the bus and coach sector is struggling to survive and that in Sweden already several companies has filed for bankruptcy.
All over Europe funding has put in place to support businesses, their workers and the economy. Anna Grönlund highlighted a few examples. “In Norway the public tendered transport will be compensated for loss of ticket income during 4 weeks. For companies with documented drop in monthly turnover of 30 per cent or more compensation will be available. In Denmark also financial support is available for companies who has lost more than 40% of their business compared to the same period last year. (In Belgium it is 60 per cent and in the Netherlands at least a loss in revenues of 4000 euros between 16 March and 15 June 2020. Compensation in both countries is 4000 euros – JH). Together with the trade unions a deal has been set up to send home drivers without companies having to pay salary costs. Also for public transport PTA's have promised that the operators will get paid as usual, deducting variable costs and with potential help from the state.” (In many European countries governments are helping paying salaries - JH)
She stated that for the short term financial support is crucial for the survival of Small and Medium-sized Enterprises (SME). But also Grönlund emphasized the need for availability of the relevant sanitary equipment and products to transport operators to protect the health and safety of their employees, as well as the
For the long term or post COVID-19, Anna Grönlund raises several questions. “Will private businesses survive? Consolidation, will there be less players in the market which probably means less benefit to consumers. Is this going to happen? Is the peoples attitude towards travel going to change? Will people look forward to travel or will they be afraid of travelling, holiday trips and weekend breaks? And what kind of transportation will they choose? The bus or do they prefer their own car when we open up society again? What effects will be seen on our cities, regarding to environment and congestion? How will this effect all the hard work we have done on climate change? And what will happen if the world enters a recession? Where then do we gain the taxes needed to maintain the health care system and all of our society. Will governments and regions be able to enlarge and obtain a public service network that attract people to take the bus to their work and the universities?”
She also raises the topic of temporarily legislation to ease up the standing legislation in Europe in order to help the companies to survive. She says that some of the regulations that are still in place are making things even worse. “For example, rules on
Passenger rights and Driver Training need to be flexible as these are extraordinary circumstances and the situation is beyond the control of the companies – it’s a force majeure. To limit the social, economic and financial consequences, exceptional measures must urgently be adopted by governments so that the sector survives. The decision makers need to ensure basic continuity of the passenger transport services as they are essential for society and the economy. These measures, including financial support, need to be deployed very rapidly to private transport networks in order to ensure the continuity of services during the crisis and to swiftly resume regular operations once COVID-19 is under control.”
“As an industry we need to raise our voice to unite in these difficult times and need to tell our governments and decision makers to support our sector, because urban and intercity transport and coach tourism are all vital to the economy and we as a sector support our society after this crisis.”
Prasanna Keshav Patwardhan is the President of BOCI - Bus & Car Operators Confederation of India (1.35 billion inhabitants). Its members operate 1.5 million buses and coaches. Almost 90 per cent is operated by private businesses. Despite India until now has relatively few COVID-19 patients and victims it has taken the most stringent measures. In almost 80 per cent of the country there is no movement at all, bus lines, railways, airlines are all closed. From this 80 per cent a lock down has put in place for 30 per cent, which means in those areas everybody has to stay indoors. That's why Prasanna Keshav Patwardhan is attending the webinar from his bedroom, but he explains that those stringent measures are the reason that the situation is under control. He expects that it will last at least another two or three months. “Our business has dropped to almost zero. The Indian government has not yet given support to the industry. We are waiting. Our main demand is for supporting salaries of our workers. Otherwise unemployment will rise enormously. Around 6 million people are directly employed by our members. And it is very important that we retain these people for our companies. For small businesses there is support for the salaries in the order of 25 per cent. But the salary is more or less 10,000 rupees and a dollar is worth 75 rupees. Apart from this there is no support what so ever.”
He also says that the government and the banks are willing to reschedule pay back of loans, but he warns that this is up to the bank to decide. “It is not a concrete proposal. It will benefit temporarily the cash flow, but for some it will mean a bigger burden. We are expecting that at least for three months the interest is taken up by the government and the banks should reschedule the payments on the loans. When all our businesses are losing money why should banks still earn money on the loans. Our third demand is for relief on taxation.” He explains that taxation rules varies from state to state in India. “In some states if you keep your vehicle in non-use, you do not need to pay tax. In other states an amount on tax is charged no matter of the bus is running or not. Taxation in India is very heavy. On fuel fifty per cent. Also the motorvehicle taxes are high. If we can get rid of those taxes we will be much better off and we can survive. And the government should make their payments in public private partnership projects on time.” Also the sector wants suspending of the insurance polices for three months for vehicles which are not on the road. Another possibility for relief for the bus companies is suspending the charging of toll when operation is starting up again. We have to adept to the new normal, it all will be different like this Busworld Academy webinar is now showing us all over the world. This is a black swan event, all of us will have to face this and have to be ready. The big challenge will come when things are going back to normal. Today we are thinking of paying salaries to our workers, but restarting the business will be really challenging. What will happen to tourism, for this year it is almost over. And for example, what kind of systems doe we need to put in place to be ready for social distancing?” To face the new normal, he believes more collaboration is needed between the different modalities, railway, metro and bus. “How do we manage this and integrate the systems.”