Go Ahead, one of Britain’s biggest bus companies, has been forced to lower its outlook for the year after the £11 million Manchester bus depot it bought from FirstGroup failed to meet expectations.
The five months since it took over in Manchester has not been enough to bring the service up to the standard that customers expect, the company said. It will need more time to make improvements, although some have already been put in place.
Go Ahead paid FirstGroup £11.2 million for 163 buses in the city in February.
“The integration of our new bus company in Manchester, combined with cost pressures in some areas of the business, has slightly lowered our expectations for this division’s financial performance for the full year,” said chief executive David Brown.
It comes two months after the company launched Britain’s first tap-on tap-off service outside London – in Brighton in September. Around a quarter of journeys are paid for using the method.
Mr Brown added: “I firmly believe in the fundamental strength of our bus business. Buses have a significant role to play in transforming the way people travel and in slowing the rate of climate change.”
The company said it is in talks with the Government over the future of its Southeastern rail franchise.
It was awarded a nine-month extension on the line earlier this year after the Department for Transport cancelled a competition for the new contract while waiting for the Williams Review on the future of rail.
The review was expected to be published in September, but will now not see the light of day until after the General Election on December 12 at the very earliest.
Go Ahead said it in in talks with the DfT to be awarded the contract directly without an open competition after April 2020 when the extension ends.
The line has reached record punctuality over the period.
Mr Brown said: “In rail, I’m pleased to see the continuation of strong performance across our UK operations, delivering some of the highest levels of punctuality and customer satisfaction ever seen on these networks.”