HOSKEN Passenger Logistics and Rail (HPLR) – which has Golden Arrow Bus Company as its main profit engine – will be hoping to pick up speed in 2021 after the Covid-19 pandemic put the brakes on profit growth in the past year.
Golden Arrow ferries a sizeable portion of Cape Town’s workforce every day, and as such can be considered a fairly accurate barometer of economic activity in the province.
The Covid-19 pandemic required some careful steering by Golden Arrow.
HPL&R’s latest annual report noted that the projection made by the City of Cape Town in May that approximately 130 000 jobs would be lost due to the pandemic during the first half of the year, mirrored the decline in passenger numbers recorded in the same period by the group’s commuter bus operations.
HPL&R CEO Francois Meyer said that to properly align demand with supply, Golden Arrow Bus was compelled to withdraw 200 buses from service and reduce manpower commensurately.
Ultimately 306 staff were retrenched in July from mainly the operations and engineering units of Golden Arrow.
In addition to this, he said short-time and temporary layoffs were also instituted to provide relief for the operation of reduced service schedules under varying restrictive lockdown regulations.
Fortunately for Golden Arrow, it was able to conclude an agreement with the Provincial Contracting Authority to pay a standing kilometre rate where scheduled operations were unduly disrupted due to capacity limitations and travel time restrictions imposed by the lockdown regulations.
Meyer said continued attention would be given to clawing back from the setbacks induced by lockdown restrictions.
He pointed out that with the easing of restrictions accompanying each level of lockdown, the number of Golden Arrow passengers showed a gradual increase ranging from a low of 10% with level five to close to 60% with level one.
Meyer said that in the case of the Sibanye Bus Services – which primarily operates routes along the western seaboard – the increase in passengers occurred at a faster rate and the expectation was that full capacities could be achieved in the short term.
The performance of Table Bay Area Rapid Transit was not affected during this period – thanks to the nature of the contractual arrangement with the City of Cape Town. But HPL&R’s Eljosa Travel and Tours – whose operations are linked to the luxury coach market segment – were severely impacted by international travel restrictions. Meyer reckoned that with a second wave of COVID outbreaks being experienced in the traditional international markets, it may be some time before this market returned to pre-COVID levels.
To make matters worse, Meyer observed that service delivery protests, in the areas in which the group operates, were becoming more common place in the run up to the general elections.
He said both Golden Arrow and Sibanye were affected by this type of action and eight buses were destroyed in the past financial year.
Ultimately, Meyer believed the recovery of the local economy will be critical in recording pre-COVID passenger numbers in the year ahead. “Utilising a reduced overhead structure to achieve budgetary targets has been elevated as a key operational imperative.”
For the past financial year HPL&R saw bottom line profit down 46% to R68 million with the reduced passenger numbers pulling down revenue 27%.
Meyer said the group had put all major capital expenditure – including its fleet replacement programme on hold. This is expected to last for at least the next 12 months.
