Sunday, 27 April 2008 22:25
The Future of Coach Company Owner Depends On Fuel Saving and Increase in Brands Value
Over 700 coach company owners are operating within passanger transportation business with more than 11.000 coaches in Turkey. However, coach company owners, who carry the responsibility of passengers everyday, are not content with their lives nowadays. The passanger volume is decreasing since the airline companies increase their number of flights all over Turkey and reduce their prices.
Coach companies are challenging with their rivals from airline companies on one hand, and with other coach companies on the other hand, in order to survive. But it is not an easy competition since airline companies have tax advantage in fuel costs. For this reason, coach companies increase the number of their regular services and reduce their prices. On top of this, when its competitor reduces the price, almost every coach company reduces its price in order not to lose their passengers.
So how long shall this price reduction continue? Fuel costs, the main cost of coach companies, rise up constantly nowadays. Nevertheless, coach companies have no chance to reflect this increase in fuel price to their fees. As a result of this, owners are trying to find different ways.
The companies, whose profit level decreases, usually purchase very expensive coaches and get into long-term debts in order to tip the scales in their favor. But, more investment does not result in more profit. It is not very easy for coach owners to get return for investment. Under those circumstances, they should control their costs at first. The initial targets to control the costs shall be optimisation of lines and occupancy rate. In other words, departure of empty bus should be prevented and lines with higher occupany rates shall be attached priority. The next target should be the minimisation of fuel costs, and, coaches shall be selected very carefully and meticulously to reduce fuel costs since coach companies usually tend to prefer coaches with extrelemy powerful engines. In this case, they blow out money from their exhaust pipe. The captain driver also have a very crucial role for minimisation of fuel costs. Drivers provide fuel-saving when they drive their vehicles in compliance with recommendations of manufacturers. When the driver achieves a saving of 3 lt/100 km shall cause over 30.000 TL financial saving for his company. This cost-saving level means a free new coach for a company which have a fleet including 15 coaches.
On the other hand, professional management and auiditing have incredibly remarkable importance for cost minimisation. Most of the coach companies are highly and deeply experienced. Most of them are governed by a family member. However, either those companies should be governed by professional executives or consultancy service shall be obtained from a professional in a global world.
The other aspect of increase in profit is to increase the revenues. The prices and fees should be increased in order to increase the revenues, and also, the main parameter is to raise brand to increase the price and fees. A company, which can raise its brand value, shall be able to reflect this fact to ticket fees. The system, from ticket purchase phase to transfer of the passenger with service vehicles to the last point after leaving the coach, should operate like clockwork. In case of being able to establish this system and a control and supervision process and also organize passenger services, coach company shall become different for its passengers and be able to apply higher fees than competitors.
After all; coach company owners should decrease the costs and increase their prices and fees under more competitive circumstances. For this reason, fuel and brand value should be considered as most crucial parameters. The company should buy appropriate coaches and hire drivers to reduce fuel consumption and also survive within the competitive environment to rise their prices by raising brand value.
If profiability is not achieved as a result of efficient operation of the whole sector, coach companies should demand and obtain supports likewise airline companies in order to survive in the future.
