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Business model

Each of our divisions is exposed to different geographies, customers, revenue models, demand drivers and competitors within the overall transport industry, and is therefore run in a decentralised way so as to be responsive to the needs of our local customers.

Our lean corporate centre focuses on fostering a high performance culture, sets the strategic direction, raises and allocates capital, develops and manages our talent, establishes key targets and standards, monitors performance and provides challenge.

While the detailed drivers differ by division, the business model of any transport operator is in principle simple. Revenues are generated either from passengers paying directly, or the service is procured on their behalf by government or other parties. The operator must ensure appropriate vehicles are available where and when they are needed, staffed by suitably qualified and engaged employees, and that the service provided meets the safety, environmental, reliability and other needs of the customers and communities served.

Successful execution of this business model delivers gains for a wide range of stakeholders: passengers get where they want to go via attractive, modern services; employees have a rewarding career; governments facilitate increased economic activity; local communities limit congestion and other environmental costs of transport; suppliers are part of a successful ecosystem; and shareholders receive an appropriate return, even after the substantial reinvestment necessary to sustain the business model for the long term. 

 

 

 

  

 Focused and disciplined bidding in our contract businesses

Approximately half our revenues are backed by contracts or franchise agreements with national government, regional and local authorities in the UK, and state and municipal authorities, local school district boards, universities and private companies in North America. Across the Group we manage almost 1,600 such contracts, which are typically competitively tendered, and of multi-year duration. Continuing to build on our many years of experience formulating successful bids at appropriate levels of risk, and managing the delivery of the resulting contracts, is critically important for our business. 

 

 Driving growth through attractive commercial propositions in our passenger revenue businesses

Our other main source of revenues is directly from our passengers, who represent a very broad demographic mix and travel using our services for a wide range of business, commuting, educational, medical, social and recreational purposes. All of our markets are highly competitive, and therefore a strong understanding of the changing needs of our local customers is vital to ensure our services are successful. Offering a responsive range of destinations, frequencies and convenient ticket options at competitive prices is a key objective in our passenger revenue businesses.

 

Continuous improvement in operating and financial performance

By its nature, the transport industry involves the risk of injury to employees, passengers and third parties, which is why it is central to our culture and values to keep safety front of mind. No less important for our customers is delivering a consistent and attractive service on which they can rely. In both areas we constantly reinforce standards and seek out best practice from across the Group and beyond in order to strive for ever more stretching improvement targets. This focus on disciplined operations and continuous improvement is also brought to bear on our financial performance, where we must manage employee productivity, asset/fuel efficiency, procurement, overheads, insurance and other costs to ensure efficient use of our resources. 

 

Prudent investment in our key assets (fleets, systems and people)

Through successful execution of the first three strategic objectives, we delivered safe and reliable transportation services for around 2.2bn passengers last year, and generated profits and substantial operating cash flow. To continue to deliver for all of our stakeholders over the longer term, reinvesting appropriately in the future is vital. Our most important assets are our 110,000 people – we invest in hiring, supporting and developing our employees to ensure we continue to have the best people delivering our services. We also invest to ensure our fleets of more than 55,000 vehicles across the Group are fit for purpose and offer the safety systems and other services that our customers want (such as smart ticketing, real-time information and Wi-Fi). We also invest in our systems and processes to support other strategic objectives, such as the current programme to transform Greyhound’s pricing, seat management and ticketing systems. 

 

Maintain responsible partnerships with our customers and communities

Our final strategic objective is to invest time, energy and capital in what matters to our key stakeholders. We focus on building long term partnerships with our customers and communities, learning what they want and striving to deliver it for them. Our long term success is built on being a responsible partner to all our stakeholders, an approach that is about much more than meeting certain ‘licence to operate’ contractual stipulations. In reality we act as a responsible corporate citizen because the long term success of our business is tightly entwined with the aspirations, opportunities and success of our customers and communities. We can only create value and deliver sustainable returns to our shareholders if our services help to create strong, vibrant and sustainable local economies, where we are the provider of choice for the customers and the communities we serve.