Bus chiefs eye plan to scrap £1.20 flat fare ticket system

BOSSES at Lothian Buses are considering plans to scrap the popular flat fare system but insisted there will be no further ticket price rises this year.

The firm's managing director, Ian Craig, said it would be "difficult to maintain" the single price journey in years to come, and said the firm had looked into the possibility of introducing a two-tier setup.

Lothian Buses has blamed the tram works for contributing to a fall in passenger numbers, which led the company to cut a number of services last year and saw the price of a single fare rise from £1 to £1.20. Mr Craig said market research had shown the company that there would be resistance from passengers to paying more than £1.20 for a single ticket.

He said there would be no more fare increases this year, but hinted that a cheaper fare could be brought in for shorter journeys at some point in the future.

He said: "Flat fares have proved incredibly popular with customers, but as they start escalating upwards it will become unattractive.

"We are concerned that we are at, or close to, that point.

"It's going to be difficult to maintain the flat fares system in the years ahead.

"Ninety-five per cent of all our revenues come from our customers. Clearly, it's vital that we continue to offer them best value."

After so many profitable years, the 2008 accounts due in June are expected to show that the main bus network ran at a loss, and Lothian only stayed in surplus thanks to its tourist buses and the Airlink airport service.

The company is also understood to have hedged its fuel costs at $90 per oil barrel until September, striking the deal when fuel costs were much higher than they are now.

That cost £3 million in 2008 and will cost a few more million this year.

Councillor Andrew Burns, the city's Labour leader, said it was right for the council-owned bus company to constantly review fares. But he added: "Fare rates are a commercial decision for Lothian Buses and given current economic conditions, I would absolutely expect them to be kept constantly under review.

"The current flat fare for all journeys certainly benefits passengers in being simple and straightforward, but it would be entirely understandable if variable rates, which Lothian used to operate some years ago, were again under consideration."

Last month, it emerged that losses incurred by the tramline in the first few years of its operation will have to be subsidised by the bus company.

Transport chiefs plan to merge Lothian Buses and tram firm TIE into a new company, Transport Edinburgh Limited (TEL), in order to create an integrated service when the trams start operating in 2011.