Stagecoach: A history of transport innovation
Few companies can match the business success story that is Stagecoach. Founded by Brian Souter and his sister, Ann Gloag, in Perth, Scotland, in 1980, the business started with just two buses. But with entrepreneurial flair and an eye for innovation, the company has grown to touch as many as five continents around the globe.
1980s: transport deregulation
Stagecoach was one of the first companies to take advantage of transport deregulation in the United Kingdom in 1980 and in the early years of the decade operated coach services in Scotland, as well as longer distance links to London.
The Transport Act of 1985 deregulated bus services, which had previously been owned and operated by councils and local transport authorities. One of the early services launched by Stagecoach was Magicbus, which operated in Glasgow and offered cheap fares to customers.
In the late 1980s, Stagecoach bought a number of former National Bus Company businesses, including Hampshire, Cumberland, United Counties, East Midlands, Ribble and Southdown.
Stagecoach was one of the first major transport operators to expand overseas and this period saw it run its first services outside the UK after buying UTM, the major bus company in Malawi.
Early 1990s: expansion in the UK and overseas
Expansion continued at a rapid pace in the early 1990s as Stagecoach bought further bus operations in Scotland, Newcastle, London and other parts of England. Manchester was added to the UK Bus division's list of companies in 1996.
Stagecoach continued to develop its overseas portfolio, adding to its operations in Africa and moving into New Zealand with the purchase of an operation in Wellington in 1992.
The floatation of Stagecoach on the London Stock Exchange in 1993 valued the company at £134m and it provided a basis to grow significantly in the mid to late 1990s.
Major overseas bus operations were bought in Portugal, Sweden and later Hong Kong. Stagecoach has since exited these markets and also sold the last of its operations in Africa in 1998.
Mid 1990s: diversifying into rail
However, Stagecoach diversified into other transport modes, most notably rail. The company had already experimented with running a Scotland to London service under the Stagecoach Rail brand in 1992. After the UK network was privatised in 1995, Stagecoach became the first company to win one of the new franchises when it took over South West Trains, the UK's biggest rail franchise. It was also successful in winning the UK's smallest railway, Island Line, on the Isle of Wight.
In 1996, Stagecoach bought the train leasing company Porterbrook for £826m and the following year added Sheffield Supertram, Britain's first state-of-the-art tramway to its growing transport empire. Within six months, the company announced a tie-up with Sir Richard Branson's Virgin Group as it took a 49% stake in Virgin Rail Group, the operator of the Cross Country and West Coast inter-city rail franchises.
For a few years, Stagecoach also had an interest in air travel after buying Prestwick International Airport in 1998. The business, along with Porterbrook, was later sold.
Late 1990s: new markets in Asia and North America
The year of 1998 was one of the busiest periods for acquisitions in the company's history, adding bus operations and ferries in Auckland to the New Zealand business and purchasing Citybus in Hong Kong.
However, Stagecoach's biggest deal took place in North America the following year with the purchase of Coach USA, the largest bus and coach operator in the US, which also included services in Canada. The company has since been restructured and now runs a mix of scheduled, contract, charter and sightseeing services in the North-East and Mid-West of the United States and in Canada.
From 2000: new millennium, new ideas
For the past three years, Stagecoach has focused on driving organic growth in its retained business in the UK and overseas, with smaller complementary acquisitions.
The company has lost none of its entrepreneurial drive and has continued to innovate, launching in 2003 the UK's first web-based low-cost inter-city travel service, megabus.com, which now serves more than 30 major cities across the UK. It has also piloted demand responsive taxibus services as it looks to develop new markets in public transport that deliver a viable alternative to the car.
In 2005, Stagecoach sold its bus and ferry operations in New Zealand. However, the Group has continued to pursue complimentary acquisitions, including the purchase of Glenvale Transport Limited's bus operations in Merseyside in the UK. Stagecoach has since bought Traction Group, which operates buses in South Yorkshire, Lincolnshire and Tayside.
Stagecoach sold its London bus operations, which operated contracts on behalf of Transport for London, in August 2006 to focus on deregulated regional bus markets in the UK.
In September 2006, Stagecoach Group was awarded the new South Western rail franchise, which incorporates South West Trains and Island Line. The new 10-year franchise runs from February 2007, with the last three years conditional upon preset performance criteria being met.
Stagecoach Group was awarded the new East Midlands rail franchise in June 2007. The new 7–year and 4–month franchise, which is worth £235million in annual total revenues, runs from 11 November 2007. The last 16 months of the franchise are dependent on meeting performance targets.
The Group became Britain's biggest tram operator in July 2007 when it took over the contract to operate and maintain the Manchester Metrolink tram network on behalf of Greater Manchester Passenger Transport Executive (GMPTE). The 10–year contract includes managing a number of special projects sponsored by GMPTE to improve the trams and infrastructure to benefit passengers. Stagecoach Metrolink will also be responsible for operating tram services on the new Metrolink lines to Oldham, Rochdale, Droylsden and Chorlton.
Stagecoach has continued to be at the forefront of innovation and in July 2007 began a two–week trial of a hi–tech 130–passenger hovercraft service on a route between Kirkcaldy and Portobello. The £300,000 trial involved the operation of 22 services a day – 11 in each direction – with convenient peak–time services and integrated bus links to accommodate commuters looking to avoid congestion on the Forth Road Bridge.
