Acadian Lines quits: Fewer rules, more riders
THE PLANNED shutdown of Acadian group’s bus services in the Maritimes is a shock to communities that rely on its coaches for passenger and cargo service. But the decision by Quebec parent Groupe Orleans Express shouldn’t come as a total surprise.
In 2010, its CEO told a Nova Scotia regulatory hearing Acadian’s entire Maritime network was “in jeopardy” because of overall losses, declining revenues and falling ridership. Groupe Orleans wanted to cut some unprofitable services, a request only partly approved by the Utility and Review Board. But the board agreed Acadian Intercity, the Nova Scotia unit, was “in a precarious financial position” and called the long-term trend “rather troublesome.”
That looks like quite an understatement today. Groupe Orleans says red-ink routes are swamping the profitable ones. Given the regulatory difficulty of streamlining, it doesn’t think it can restore profitability. Nor can it find a buyer, which suggests something is broken.
Under the current law, carriers operating buses that carry 16 persons or more get a licensed monopoly for a bundle of routes in return for meeting regulated conditions of service. But fewer rural riders and competition from smaller shuttles, some subsidized, make this a less attractive deal than it used to be.
So it’s fair to ask whether regulation is driving bus service to extinction. If not allowing carriers to decide where they can economically offer service means they offer no service anywhere, the public isn’t well-served. Better, surely, to regulate carriers on public safety and let them make their own business and route decisions based on rider demand.
The URB has let Acadian reduce some services and has said riders must use bus routes if they expect to keep them. At a 2010 hearing, board questioning also revealed Acadian was profitable in Nova Scotia but taking large losses in New Brunswick. The board was concerned the Quebec parent had placed high administration costs (25 per cent of gross revenues) on the Nova Scotia unit while not giving it credit for lower operating costs than the New Brunswick operation. It was also skeptical about the company’s understanding of Nova Scotia demographics and its marketing efforts in rural areas.
Perhaps an operation with a stronger provincial focus could improve business. But less regulation would surely help, too.
Sign of the times
Submitted by Tank on August 9, 2012 - 8:28am.
Just like the rail system we used to see crisscrossing this fine province, the bus service is also going the way of the Do Do bird. The South Shore lost MacKenzie Bus Lines a long time ago for the same reasons this one is going to fold, unprofitability. The good people of the South Shore adjusted and today, that service is but a memory to us old farts and we are no worse for the wear as other businesses sprung up to fill small but somewhat profitable voids. The last thing we need is to do is offer subsidies to yet another Quebec company so we can be pinned to a wall and ravaged.
Smaller is better
Submitted by MickeyNS on August 9, 2012 - 8:53am.
It never works when a big international company tries to run a small operation. Also too much regulation is bad for this business model.
In the short term, they should decrease rgeulation, and let afew local operators start up, then see which ones thrive, then introduce sensible routes that will service the most people, while allowing the operators to make a profit.
Lastly, no government backing, this story indictaes the NS operation was profitable, but the parent company was taking profit to ofset losses elsewhere.
Someone out there can operate a Ns bases bus system. get them to moncton/fredricton/Sj and let aNB system take over.
Run like a government operation
Submitted by No problem here... on August 9, 2012 - 8:40am.
Typical government modus operandi, let the "Profitable" routes pay for the " Unprofitable " routes. Much like the tax system, let the have's pay for the have not's, only difference is a private company cannot run up a $14 billion dollar operating loss,quite unlike the brain trusts that run this province and country. Tthe model failed for Acadian Lines, the model failed for all of the governments and provinces in this country, and still we march to the same old beat, with the same old politicians listening to the same old bureaucrats with the same old advice. Main reason? They do not know anything else, they are spenders not producers.
Correct
Submitted by honker on August 9, 2012 - 9:06am.
"Better, surely, to regulate carriers on public safety and let them make their own business and route decisions based on rider demand."
Correct, take politics and regulation out of the equation as far as business decisions are concerned, let competition prevail and innovation will occurr. I realize this is not the Nova Scotian way where government is supposed to come up with all the solutions that bother us in our lives. However, every so often Nova Scotians get jolted into reality and this is one of those times. Regulation will not save you but a healthy, competitive business environment might just be what is required.
Shake down
Submitted by 1springgarden on August 9, 2012 - 9:03am.
The multinational corporation that owns Acadian is trying to shake us down for greater profits. They are a monopoly bargaining in public against regulation. Their 25% administration costs show their numbers aren't reliable. I'd wager a bus ticket Acadian will still be using their facilities after Nov. 30. The NS government should not give them any subsidies or concessions.
Here we go again
Submitted by Dean on August 9, 2012 - 11:13am.
Well once more we see typical East Coast overregulation and overtaxation of a privately run organisation.The company simply wanted to cut unprofitable routes, a sensible proposition, but no, government had to stick their nose into it so now we see the result - another group forced to leave.Now the culture of dependency kicks in and some want a government (ie taxpayer) funded bus service.Amazing.Again we see just how bad Atlantic Canada treats business; do what we say or leave.No wonder the % on welfare and EI is so high,afterall what organisation in their right mind would ever set up shop in backwater provinces with such disdain for business?
Time For A Reality Check
Submitted by daveburris on August 9, 2012 - 11:11am.
This province is so over-regulated and over-run by bureaucrats, it is just amazing that anything gets done.
The editor gets it, Honker gets it "Better, surely, to regulate carriers on public safety and let them make their own business and route decisions based on rider demand."
YES!! Get the bureaucrats out of business decisions which they seem to know little or nothing about.
And here goes the URB again - July 30, 2012 - CH, "Molega Tours Ltd. asked the Nova Scotia Utility and Review Board in May for permission to acquire a pair of new 56- or 58-passenger buses. But the board REJECTED the plan in a decision Monday, saying there isn’t enough business in the motor coach industry to support two additional coaches"
Sure the URB knows better than the guy running the business. Sure they do. So what if Molega does go belly-up, it is their money, why would we care?
And these are the guys who are going to rule on the Newpage operations, as well as the Muskrat Falls fiasco. Heaven help us.