History of the PTE bus operations

The Passenger Transport Executive (PTE) bus operations were the bus operating divisions of the passenger transport executives in the United Kingdom. In 1986 they underwent a process of deregulation and privatisation, forming some of the largest private bus companies in the UK outside London, with all being sold to their employees or management. Despite their relative size and lucrative operating areas, none of the companies survived beyond the late 1990s, with all falling into the hands of the major bus groups, who had their origins in privatised regional subsidiaries of the former National Bus Company and the Scottish Bus Group.

Background

The first passenger transport executives (PTEs) and passenger transport authorities (PTAs) were established by the Transport Act 1968.

The PTEs were local authority bodies responsible for running transport operations in their respective regions, accountable to the PTAs. Although trams, underground trains and light rail systems were included, the majority of transport operations controlled by the PTEs were bus services.

Former municipal bus companies absorbed into passenger transport executives

Many municipal bus companies in the largest conurbations came under the control of passenger transport executives following the Transport Act 1968. The following is a list of the seven PTEs established in either 1968 or 1974, and the municipal bus companies which became part of combined bus fleets.

* Merseyside (1969)
** Birkenhead
** Liverpool
** St Helens (1974)
** Southport (1974)
** Wallasey
* SELNEC (South East Lancashire North East Cheshire, 1969), later Greater Manchester (1974)
** Ashton-under-Lyne
** Bolton
** Bury
** Leigh
** Manchester
** Oldham
** Ramsbottom
** Rochdale
** Salford
** Stalybridge, Hyde, Mossley and Dukinfield
** Stockport
** Wigan (1974)
* South Yorkshire (1974)
** Doncaster
** Rotherham
** Sheffield
* Strathclyde (1972)
** Glasgow
* Tyneside (1969), later Tyne and Wear (1974)
** Newcastle upon Tyne
** South Shields
** Sunderland (1973)
* West Midlands (1969)
** Birmingham
** Coventry (1974)
** Dudley Midland Red operations (1973)
** Walsall
** West Bromwich
** Wolverhampton
* West Yorkshire (1974)
** Bradford
** Halifax
** Huddersfield
** Leeds

Deregulation

In 1986 as a result of deregulation of bus services all PTEs were compelled to transfer their bus operations to "arms length" public transport companies.

This meant that the PTE/PTA could no longer regulate the routes and fares of the bus operators, nor could they prevent (legal) competition from external operators. The PTEs moved to a role of maintaining common facilities and financing less profitable but socially necessary services, although these had to go to open tender.

As a result of the split, all bus operations were re-branded:

*South Yorkshire as SYT (South Yorkshire Transport)
*West Yorkshire as Yorkshire Rider
* West Midlands as West Midlands Travel
* Strathclyde Transport as Strathclyde Buses
*Greater Manchester as GM Buses (split into North and South divisions in 1993)Greater Manchester Transport Timeline
Museum of Transport
* Merseyside Transport as Merseybus
*Tyne and Wear as Busways

The rebranding served to underline the new separation of responsibilities between the PTEs and the bus companies. In order to promote competition, the GM Buses operation was split in two in 1993.

Privatisation

All the arms length bus companies were privatised by 1994:

* SYT sold in 1993 to employees
*Yorkshire Rider sold in 1988 in a management buyout
* West Midlands Travel sold in 1991 as an esop ( employee shared ownership plan)
* Strathclyde Buses sold in 1993 to employees
* GM Buses North sold in 1994 in a management buyout
* GM Buses South sold in 1994 in a management buyout
* Merseybus sold in 1993 to employees as MTL (Merseyside Transport Limited)
*Busways sold in 1989 as an esop

Competitive strategies

Competition with new companies

As a result of deregulation, all the new bus companies faced competition from both regional operators and small independents. Some of the biggest competition occurred in Liverpool, with competition with Merseybus from North Western and generally professional medium to large-sized independents like CMT Buses, Fareway, Liverbus and Liverline. When Merseybus was sold to its management and employees and transformed into MTL it acquired most of these competitors, most notably Fareway and Liverbus with Liverline acquired by British Bus and integrated into its North Western operation.

Several PTEs faced competition from operators set up by former PTE employees made redundant during deregulation and/or privatisation. Several new competitors appealed to local customers by resurrecting former municipal company liveries which had disappeared with creation of the PTEs.

Competition by the new companies

As PTEs had historically held operating areas limited by authority boundaries, expansion into neighbouring areas was a viable strategy. Busways had looked to expand into other areas, notably Darlington. This was put on hold as the company was sold to Stagecoach Group, although the Busways company proceeded to immediately renew interest in Darlington, resulting in the events of the Darlington Bus War. Strathclyde Buses merged with the neighbouring ex Scottish Bus Group operator Kelvin Central Buses.

Some companies competed by setting up low cost units to compete for tendered services, such as Blue Bus and TWOC of Busways, and Merseyrider of Merseybus. West Midlands Travel set up an express coach service with London Regional Transport to compete with National Express, who would ironically later purchase WMT.

One of the largest pieces of competition came from competition between MTL and GM Buses South, with both operators setting up operations in each other's areas. This led to both operators losing money, and was ended in a gentleman's agreement. A similar tit for tat occurred between SYT and West Riding Buses, using investment in Compass Travel and new operation Sheffield & District respectively.

Several of the companies had difficulties in competing or upgrading their fleets due to repayments due to be made on loans made to finance the privatisations.

Stagecoach Group adopted a strategy of taking minority stakes in the new companies. At Mainline, a 20% stake was taken to assist in financing fleet upgrades, and to give Stagecoach first refusal in any event that the company was sold. Stagecoach also took a 20% stake in SB Holdings, Strathclyde's owning company, ostensibly to prevent imminent competition from Stagecoach West Scotland. Following a Monopolies & Mergers Commission inquiry investigating the Darlington Bus War, Stagecoach sold its stakes in both SBL Holdings and Mainline to FirstGroup