Arriva's future?

[winston]

DB are considering putting Arriva Group up for sale again: https://www.bloomberg.com/news/articles/2023-01-17/deutsche-bahn-is-said-to-consider-reviving-sale-of-arriva-unit?leadSource=uverify%20wall

[Coventrybususer95]

Could we see nx try to buy them?

[winston]

Could we see nx try to buy them?

Not very likely. Only small parts of Arriva maybe. 

NX don't have the cash & I doubt they could take on more debt to buy the whole of Arriva Group.

[Rachvince53]

More likely broken up with elements bought by the likes of Rotala and Centrebus Group, possibly Stagecoach too. I can't see Arriva being bought wholesale by one company, for one thing there's the competition authorities who would examine any deal which resulted in less competition.  

[winston]

More likely broken up with elements bought by the likes of Rotala and Centrebus Group, possibly Stagecoach too. I can't see Arriva being bought wholesale by one company, for one thing there's the competition authorities who would examine any deal which resulted in less competition. 

Doesn't necessarily have to be acquired by another transport group, DB only want to sell Arriva as a complete Group.
 
Last time buyout firms Carlyle Group & Apollo Global Management Inc were in talks to buy the group, but valuations didn't meet DB's expectations & talks were called off.

[markcf83]

More likely broken up with elements bought by the likes of Rotala and Centrebus Group, possibly Stagecoach too. I can't see Arriva being bought wholesale by one company, for one thing there's the competition authorities who would examine any deal which resulted in less competition. 

Agreed. 

[metrocity]

DB are considering putting Arriva Group up for sale again: https://www.bloomberg.com/news/articles/2023-01-17/deutsche-bahn-is-said-to-consider-reviving-sale-of-arriva-unit?leadSource=uverify%20wall

Their latest accounts show an £86m loss, I doubt there will be a large queue of bidders on that basis

[winston]

Their latest accounts show an £86m loss, I doubt there will be a large queue of bidders on that basis

It will certainly affect the offers DB receive if nothing else.

It sounds as though DB will struggle to even get back the original £1.6 billion they paid for Arriva in 2010.

[j789]

Excluding their London operations, of all the larger transport groups, Arriva do seem to have the most challenging operating areas in the current market. Whilst they do have some urban operations, such as in Liverpool and Leicester, many of their territories have significant amounts of rural operation which is particularly challenging at the moment.

Their operations do seem more exposed to the effects of the post-covid operating environment and associated issues related to this, such as reduced passenger numbers vs higher operating costs.

[Tony]

Excluding their London operations, of all the larger transport groups, Arriva do seem to have the most challenging operating areas in the current market. Whilst they do have some urban operations, such as in Liverpool and Leicester, many of their territories have significant amounts of rural operation which is particularly challenging at the moment.

Their operations do seem more exposed to the effects of the post-covid operating environment and associated issues related to this, such as reduced passenger numbers vs higher operating costs.

What is now Arriva North East was very profitable when it was owned by West Midlands Travel

[j789]

What is now Arriva North East was very profitable when it was owned by West Midlands Travel

Was the reason for this sale in the 90s purely financial? Was there any real scope for WMT to continue expanding in other areas outside the West Midlands?

[winston]

Was the reason for this sale in the 90s purely financial? Was there any real scope for WMT to continue expanding in other areas outside the West Midlands?

WMT was expanding rapidly outside of Birmingham in preparation for a stock market listing, they bought North East Bus, County Bus & Coach, Westlink & Highland Country Buses. They also bid for GM Buses North & some London Buses subsiduaries but were unsuccessful.

NX & WMT then merged & the above ops were considered non core, which was high frequency urban ops, hence their sales under NX ownership.

[j789]

WMT was expanding rapidly outside of Birmingham in preparation for a stock market listing, they bought North East Bus, County Bus & Coach, Westlink & Highland Country Buses. They also bid for GM Buses North & some London Buses subsiduaries but were unsuccessful.

NX & WMT then merged & the above ops were considered non core, which was high frequency urban ops, hence their sales under NX ownership.

Thanks for that. I did not know they owned Highland Country. I'm sure HC operated some of the V reg WMT Nationals so maybe they were transferred under ownership.

[Budgie]

Should the future of Arriva worry the bus industry as a whole? Is there a potential time bomb in the making?

Using the fleet lists on this website as of yesterday, a quick analysis suggests that there could be huge implications for the South and Midlands divisions over the next few years. Using the basis I understand that before deregulation and in London before Covid buses ran for 4 years, overhaul, 8 years, overhaul, 13 years then retired (a good split even if not the case), hopefully you see the following (excluding coaches, training buses, Unite bus etc).

   

	Zone 1	Zone 2	Zone 3	Zone 4	Zone 5	Total
	68-72 plate	64-18 plate	59-14 plate	55-09 plate	05 and earlier
Midlands	65	201	227	179	11	683
Mids %	9.52%	29.43%	33.24%	26.21%	1.61%
South	33	161	165	149	62	570
South %	5.79%	28.25%	28.95%	26.14%	10.88%

It feels the percentage of older buses, over 13 years old may well reflect the position of other big operators. However, the ratio of buses in each age range looks wrong. Far too few in the "new" stage, far too many in the 3rd stage, meaning as the older buses fail, only a big investment drive could keep the status quo.

Even with those in Zone 2, I calculated 76 were 64 plates, at the very end of the age range.

Why would any new buyer, or indeed the current ownership have a change of investment choices, especially as we are told post Covid passenger numbers are lower?

[Budgie]

I think in particular the Midlands fleet has a problem.  Newest buses in each depot suggests that new investment might not be coming soon. As an example of newest buses

Aylesbury 9 DD 15 plates over 7 years old now
High Wycombe 5 SD 15 plates only ones under 10 years (having lost their 17 plates they had from new)
Tamworth 10 DD 64 plates
Telford 16 SD 64 plates (excluding the 1 on loan)
Oswestry 7 SD 63 plates
Shrewsbury 5 SD 13 plates.

What future can these depots have?

Arriva do invest in new buses as seen in Luton, Leicester and Gillingham. Yet some of the oldest buses in the Arriva Midlands fleet are at Luton including W reg DDs and the oldest single deckers. So these depots need further investment just to maintain their current status. That suggests cascading from the depots getting investment, such as we are seeing happening from Leicester at the moment, will be tough