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National Express Group Plc Business Information, Profile, and History

company rail travel services

75 Davies Street
London W1Y 1FA
United Kingdom

Company Perspectives:

We operate local transport businesses which are run by local people to meet the needs of the communities we serve. We conduct our business to ensure that these communities receive both economic and social benefits. Our 40,000 employees are committed to improving the quality, value for money and the safety of all our services. We invest in all aspects of our services, to attract more passengers and maximise the use of public transport systems. We are committed to taking advantage of the many opportunities for growth which exist in the international public transport market.

History of National Express Group Plc

If you have ever used public transportation in the United Kingdom or Australia, or ridden on a school bus in the United States, you probably have National Express Group PLC to thank for your arrival. National Express, one of the world's leading international public transport groups, moves over one billion passengers a year worldwide through its bus, train, and coach operations.

Since its privatization in 1988 and formation as a company in the early 1990s, National Express has grown from a small express coach operation to a huge multinational corporation that actively pursues new opportunities. The company maintains a reputation for efficiency and innovation, and is dedicated to changing the perception of public transportation from a last resort to an easy, affordable, quality-travel option.

Origins of National Express: The Rise of Public Transportation in Britain

The major piece of British legislation that changed the landscape of public transportation was the Transport Act of 1980. It altered the required-licensing restrictions and allowed for competition. Soon after its enactment, other companies began appearing, offering long-distance coach routes in the United Kingdom. National Express jumped into this newly competitive market, offering new services and low fares, and continued to maintain a strong customer base and major brand. In this growing spirit of competition, National Express was allowed to be fully privatized by the Government in 1988. The management performed a full buyout, which took place in March.

National Express Group PLC was formed and shares were first offered on the London Stock Exchange in December of 1992. The newly public company was valued at £60 million. The prospectus stated the objectives of the company were to refocus and improve the profitability of their core coach business, to develop new products and services within its existing operations, and to acquire new businesses as financially viable in the passenger transport market.

Rapid Growth: Acquisitions and Successes, 1993-1999

The company immediately began to keep its promises of acquiring new businesses and adding to its portfolio. In 1993, just one year after becoming a public company, National Express acquired several major new properties. It acquired Scottish Citylink, expanding its services across Scotland. A few months later, the Group acquired Eurolines, an express coach company with a Pan-European network, followed by the acquisition of East Midlands Airport. In April 1995, National Express acquired Bournemouth Airport.

In 1995, the company took over the operations of one of Europe's largest urban bus systems, West Midlands Travel. This, along with the 1997 acquisition of Taybus Holdings, a Dundee-based bus company, expanded National Express's bus interests in their home nation.

The mid-1990s also saw the privatization of the rail industry in the United Kingdom. National Express took this opportunity to expand into rail services, and it applied for and was awarded the franchises for the Gatwick Express and Midland Mainline in 1996. The next year, National Express acquired three more rail companies. North London Railways (also called Silverlink), Central Trains, and ScotRail, became part of the National Express network. These acquisitions made the company one of the largest rail operators in the United Kingdom. They continued to concentrate on their bus services as well, expanding their operations in December with the Belgian bus operator, Bronckaers.

In 1998 the company began to examine overseas acquisition opportunities. It entered the United States markets in September by becoming involved in student transportation. It acquired Crabtree-Harmon, the seventh largest student transportation bus company in the states, with 82 school bus contracts mainly in Missouri, but also in other Midwest states including Kansas, Iowa, Oklahoma, Utah, and Colorado. This gave National Express its first foothold in the U.S. bus system. One year later they added Robinson Bus Service and Durham Transportation, both also major student transportation bus operators. These acquisitions placed National Express as one of the top three largest U.S. school bus operators.

National Express also began acquiring properties in Australia, quickly becoming the single largest private transport operator within that country. In May of 1999, it acquired bus operations in Melbourne, Brisbane, Sydney, and Perth when it took over National Bus Company Pty. Limited (NBC), the largest privately owned bus company in Australia. In September, National Express was awarded three of the available five rail and tram franchises within Melbourne and the state of Victoria.

Times of Trial: 2000-2002

National Express made another major acquisition in the United States in 2000, expanding its presence in the states from student transportation to airport operations. On March 31, it took over a 99-year lease on the formerly commercial Stewart International Airport, located 55 miles north of New York City, making National Express the operator of one of the nation's privatized airport.

National Express, satisfied it had established a strong international presence, again began to concentrate on additional expansions in the United Kingdom. In 2000, National Express acquired Prism Rail. Prism Rail, made up of the busy London commuter train operating companies WAGN and c2c, was a major addition to National Express' local offerings. The group also acquired the Wales and West and Valley Lines and began work on a nationwide, multi-modal smart card ticketing system for public transport services after it acquired Prepayment Cards Ltd. (PCL). The group's introduction of travel smart cards for bus and rail passengers was targeted to increase the network of public transport services, offering passengers wider-ticket availability, as well as ease and speed of use. An added benefit for the Group was the introduction of special programs using the technology that would work to improve passenger loyalty and would put into place frequent-user plans for bus and rail users.

However, the spirit of expansion would be short-lived. In July, the company announced that Atlantic Express Transportation Group Inc., a New York-based student transportation operator, had commenced legal proceedings in damages in excess of US$75 million. Atlantic claimed that National Express had used confidential information gained as part of a due diligence to assist with their acquisition of Crabtree-Harmon. The company decided to pay Atlantic the sum of US$24.5 million to settle the claim out of court while maintaining this was not any type of an admission of liability to the charges. In October, a major tragedy changed the face of the British transportation system. Major setbacks began with the catastrophic derailment of a high-speed train at Hatfield, England, between London and Leeds. In this crash, four people were killed and at least 24 were injured. This crash caused a crisis in the transportation market, and National Express saw an immediate drop in income at its franchises, resulting from disruption on the rail network and speed restrictions imposed after the crash. National Express' shares also fell 35 percent due to this disruption on the railways.

With all its expansion within its bus and rail markets early in the year, and the troubles the industry faced in 2000, the company decided in March 2001 to leave the British airport market. It sold both its East Midlands and Bournemouth Airports to Manchester Airport. They decided to refocus and concentrate again on revitalizing their core businesses in the wake of a declining market.

Before the industry had adequate time to recover, the transportation industry had to again contend with a major tragedy--the terrorist attacks on the United States on September 11, 2001. These attacks had a resounding effect on global travel, and National Express saw a significant decrease in already low levels of traffic and a downturn in leisure travel in the United Kingdom and in their global interests. The Group also had to manage a doubling of their insurance premiums to £60 million because of the attacks.

In 2002, help was needed for some of National Express's major lines, and two of National Express's railroad subsidiaries received assistance from the Strategic Rail Authority (SRA) in order to avoid potential reductions in service. Central Trains, which operated passenger services in the Midlands, East Anglia, and central and South Wales, received £22 million and £34 million went to bail out ScotRail. The year continued to be a difficult one for the Group, after a coach driver, en route from Plymouth to Scotland, was stabbed in the face and shoulder after confronting a passenger who activated a smoke alarm in the vehicle's toilet.

The Group continues to keep positive that the industry will normalize, and remains steadfast regarding National Express's position to take advantage of the impending recover. Chief Executive Phil White wrote in the company's annual letter to investors, "U.K. train patronage has recovered to pre-Hatfield levels but there is still no real evidence of growth returning. However, we intend to play an integral part in rebuilding consumer confidence in U.K. rail. Our bus businesses worldwide continue to perform well and we intend to grow these operations both organically and by acquisition."

Principal Subsidiaries:Altram LRT Limited (33%); Inter-Capital and Regional Rail Limited (40%); National Express Trains Limited (100%); West Midlands Travel Limited (100%).

Principal Competitors:FirstGroup; Go-Ahead Group; Stagecoach; Arriva PLC.

Chronology

  • Key Dates:
  • 1988: National Express is privatized by the British government.
  • 1992: The company's stock is first offered on the London Stock Exchange.
  • 1993: The company acquires Scottish Citylink, expanding its services in Scotland, and Eurolines, an express coach company.
  • 1995: The company acquires Travel West Midlands, one of Europe's largest urban bus systems.
  • 1996: The company acquires its first train companies: Gatwick Express and Midland Mainline.
  • 1997: The company acquires Taybus Holdings, a Dundee-based bus company, and three more rail companies: Northern London Railways (Silverlink), Central Trains, and ScotRail.
  • 1998: The company acquires Crabtree-Harmon's school bus interests in the United States.
  • 1999: The company becomes the single largest private transport operator in Australia.
  • 1999: The company purchases other U.S. student transportation bus operators: Robinson Bus Service and Durham Transportation.
  • 2000: The company acquires London's Prism Rail, WAGN, and c2c commuter train lines; and operates Stewart International Airport (north of New York City).
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