Trams to blame as city bus services face axe

BUS passengers are facing three years of service cuts in the Capital, despite Lothian Buses making record profits last year.

The company today blamed disruption to services by trams roadworks for a five per cent drop in passenger numbers so far this year. Falling customer numbers and the rising cost of

fuel means the company is facing its toughest trading conditions in over a decade and bosses say cuts in services must be made.

Today, the council-owned company posted results showing profits rose by 20 per cent to £5.9 million during 2007.

As a result, the city council stands to pick up a £2m dividend – just as the bus company is looking to axe lossmaking services.

Today's profits announcement is bound to see pressure grow on the council to forego at least part of its dividend in order to support bus services.

The Evening News understands that lossmaking services are likely to remain under threat for the next three years while the tram line is completed unless passenger numbers pick up.

Disruption from roadworks is undermining confidence in the bus network and shoppers are thought to be avoiding the area around Princes Street and St Andrew Square as a result of the delays.

Ian Craig, managing director of Lothian Buses, said: "It is clear the disruption in the city centre and elsewhere has lost us more passengers than we have gained from the petrol price increases.

"This confirms that, due to the disruption, we have lost five per cent of our passengers.

"This is in line with figures from some major Princes Street retailers who, I understand, are reporting sales in central Edinburgh hit harder than at other locations."

In March, Lothian Buses revealed it was facing a £4m shortfall because of increases in tax and fuel costs, as well as a Scottish Government freeze on a rebate to transport operators used to cover rises in fuel duty.

The firm said this forced it into an unscheduled fare rise in April, as well as leaving it now looking to cut its lossmaking services in order to balance the books. It is understood the financial situation has been made worse by the cost of putting on extra buses to try to keep services as reliable as possible in the face of the tram works.

Pilmar Smith, chairman of Lothian Buses, said: "These represent a robust set of results, all the more when one recalls that, during 2007, fares were not increased, other than the price of a day ticket.

"It's a good job our 2007 results left us in a healthy position, as 2008 has proved to be particularly challenging, and i t looks as if this year's results will be very different."

Turnover at Lothian Buses in 2007 was just under £100m, up from £89.5m in 2006. The firm recorded its tenth consecutive year of passenger growth.

It spent £17.8m on new buses which led to 85 new vehicles being introduced to the city's streets.

• www.lothianbuses.com