Transport for London has released an update on how Coronavirus (Covid-19) has affected passenger numbers on the tube and buses, and how it is going to utilise its reserves to manage the financial impact.
A softness in demand and passenger revenue, caused by economic uncertainty, had been experienced by Transport for London since October 2019, with both Tube and bus revenues trending at around 2 per cent lower than the previous year.
During February, revenue was further affected by three significant storms and a period of bad weather.
Further reductions were felt from the beginning of March, which coincides with the growing awareness of the Covid-19 virus, this saw a reduction of 2% when compared to the same days last year.
Since then, a number of businesses have changed their travel behaviour, with greater numbers of people working from home.
This has led to a reduction of around 19% on the Tube, and 10% fewer passengers on buses.
The key factors of the reduction appear to be:
- a significant reduction in visitors to London, visible through the traffic on the Tube connecting the airports and Central London;
- firms asking staff to work from home as part of their resilience planning;
- the continued underlying softness of demand, especially off-peak. This is likely to relate to consumers remaining cautious about their expenditure given the subdued economy and now the impact of Covid-19.
TfL's current forecast suggests that this could be a reduction in passenger income of up to £500m.
Tight cost control has meant in recent years that TfL has reduced its deficit from £1.5bn to £200m.
The significant impact of Covid-19 will now also need to be managed.
TfL is communicating with Public Health England, which says that there is no specific risk on public transport. TfL has stepped up the cleaning regime on its services and in its work environments beyond the already existing high standards.
TfL is also planning what it needs to do to recover once the pandemic has subsided.
What did the officials say?
Simon Kilonback, TfL's Chief Finance Officer, said:
“Our best forecast, based on government scenarios, is that the financial impact of the coronavirus could be up to £500m. We manage our finances prudently, and have reduced our deficit hugely in recent years. This means that we can manage the impacts on our passenger numbers and finances that are currently envisaged. But, given the nature of the situation, we will be looking to the Government to provide appropriate financial support.
“We continue to follow and communicate Public Health England advice, including that there is no specific risk on public transport. We've also stepped up our cleaning regime from the already very high standards to give our customers and staff further reassurance.”
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