A year of upheaval for the transport sector

Aug 21 2009 By Andrew Hebden, The Journal

WHETHER you are operating buses, trains, airports or even a fleet of lorries, the twin challenges of a deep recession and seemingly endless rises in fuel costs have made the past 12 months a really challenging time.

The headlines have been dominated in recent weeks by the problems encountered by the East Coast Main Line operator National Express, which now looks certain to hand back the franchise at the end of the year amid its financial woes.

The recession has meant that passenger numbers on the East Coast have not grown in line with the company’s own ambitious forecasts and it now feels unable to meet the demanding terms of the agreement it signed less than two years ago.

Chief executive Richard Bowker has already stepped down and it remains to be seen who will be the influential individual charged with running this important service in the long term, with the Government expected to hold the fort for at least 12 months. National Express’s Sunderland-based rival Arriva is not immune to the effects of the downturn, either, having taken over the running of the Cross Country franchise.

However, the firm did have reason to celebrate last month when it was named the North East’s biggest company at The Journal Top 250 awards, knocking fellow Wearsider Nissan from the top spot. Chief executive David Martin has led an impressive period of growth for the business since taking over the top job there in 2006.

The North East’s two airports have also found the going tougher this year with passenger numbers down at both Newcastle International and Durham Tees Valley. The latter has been hit particularly hard and suffered a series of blows with the loss of several key routes, notably the bmi service to London Heathrow.

At Newcastle, there has been delight at the success of the first year of operations by Emirates – the airport’s first long-haul scheduled service has been the airline’s most successful new route from the UK in the past year. Chief executive Dave Laws still wants to see a transatlantic service operating from Newcastle, but ambitions may be curtailed in the short term by the recession, which has hit all of the world’s airlines very hard.

There are exciting times ahead at Nexus following the announcement last year that funding has been secured for a £300m overhaul of the Tyne and Wear Metro system. As a condition of the deal, the train operating part of the Metro system has had to go out to tender and the winning bidder will be announced over the coming months, with an in-house team competing with several foreign-based operators for the contract.

Elsewhere in this section, Northumbrian Water has begun the search for a new managing director following the announcement that John Cuthbert is to stand down from his post next spring. Mr Cuthbert is one of the most respected senior business leaders in the region and has a range of interests outside his day job of leading one of the country’s most successful water companies. His will be big shoes to fill.