The industry is at its most competitive when operating routes customised to leisure or charter travellers
Melbourne, Australia (PRWEB) January 25, 2015
The Long Distance Bus Transport industry is just one of the options travellers have to move around rural and regional areas. The industry also connects areas that otherwise have no public transport coverage. It also transports leisure travellers to far-flung locations in comfort and ease, and provides charter services for a range of purposes. According to IBISWorld industry analyst Caroline Finch, “the industry is at its most competitive when operating routes customised to leisure or charter travellers, and it is in these segments that many large private operators are innovating. Almost half of the industry serves the commuter market, operating routes that attract government subsidies. These subsidies, in combination with farebox revenue, make up total industry revenue.
Over the five years through 2014-15, industry revenue is expected to decline at a compound annual rate of 2.2% to be worth $1.8 billion. This includes a decline of 2.1% in the current year. The poor performance of regional commuter services has contributed strongly to this decline. “With slow growth in regional populations, the ongoing penetration of low-cost airlines and pressure on state government budgets, there has been little incentive for state governments to fund service expansion,” says Finch. For many operators, the value of contracts awarded and farebox revenue has actually failed to keep pace with inflation, which has become a drag on industry performance. In addition, the charter sector has been under pressure, as many aging owner-operators have withdrawn from the market. Demand has not created lucrative enough conditions to draw in more owner-operators to replace them. Offsetting some of the negative factors in these areas has been the expansion of leisure markets. National bus companies have invested in luxurious new vehicles and offered new routes to target emerging tourist markets. In the next five years, the industry's performance is forecast to stabilise. Declines in charter and commuter services are anticipated to level off, and growth will continue in leisure market services.
The Long Distance Bus Transport industry can be characterised as being highly competitive. The industry includes a large number of small operators and low market concentration. The industry is dominated by small operators. According to the Australian Bureau of Statistics Business Counts, over half of all industry establishments are non-employers. The number of non-employers in the industry has decreased in the five years through 2014-15 with industry consolidation.
For more information, visit IBISWorld’s Long Distance Bus Transport industry in Australia report page.
Companies in this industry operate buses to transport passengers over regular routes and on regular schedules, mainly outside metropolitan areas or over long distances.
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