Bus firms clash on cut price services

Andrew Leach|Mail13 April 2012

A BATTLE of the buses is about to break out on the motorways between two of the industry's biggest players, National Express Group and Stagecoach.

Stagecoach is a major franchisee of National Express's coach operation, but industry sources said the pair have fallen out.

Stagecoach's decision in March to launch its cut price Megabus service linking cities in England, Scotland and Wales is said to be at the root of the problem.

The no-frills service, which passengers must book on the internet, is pitched directly against some National Express routes and offers single fares from as low as £1.

Just months after the launch, Stagecoach, which operates 20% of National Express's coach services in terms of mileage, has been asked to tender again for those routes.

A spokesman for National Express denied that Stagecoach had been targeted and said the company put all its routes out to tender each year.

He added: 'We are in the middle of our annual review and each tender is evaluated on its merits.'

But industry sources said National Express, the UK's largest scheduled coach company, had invited firms to tender against Stagecoach.

A Stagecoach spokesman said: 'We are taking part in the normal tender process.'

As well as its coach services, National Express, headed by chief executive Phil White, runs buses and trains and carries more than one billion passengers a year.

Stagecoach chief executive Brian Souter is expected to provide an update on the Megabus operation when he reports the annual results on Wednesday.

Analysts expect the group, which also runs bus services and has a stake in Virgin Rail, to report profits of about £108m.

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