##### 3.4.1. Deregulation and privatisation of National Express

Deregulation of express coach services took effect under the 1980 Transport Act. In 1980 the network of coach services offered by regional bus and coach companies within the National Bus Company (NBC) was given the name National Express. National Express (NE) was subsequently set up as a private company, and as part of the NBC privatisation, it was privatised through a management buy-out in 1988. After a subsequent change of ownership, it was floated on the stock-exchange in 1992. National Express Group PLC is the holding company, of which National Express Ltd, is the largest subsidiary, operating the express network. It owns a small number of vehicles, but contracts-in vehicles from other operators, on a distance-based rate.

In 1984, NE had some 80% of the national market of $ £17 $ million a year. Since then its dominance has increased, notably through the incorporation of Scottish Citylink in 1994. An enquiry was carried out by the Monopolies and Mergers Commission (1994) following the merger. This concluded that the main competition lay between coach and rail, noticeably in pricing, and that the merger enabled both operators to escape a loss-making situation on the trunk London routes. Its approach contrasts with that of enquires into bus competition by the MMC, in which competition between bus operators has been examined, but not the issue of competition between buses and other modes.

A different pattern existed in Scotland. At the time of deregulation, the Scottish Bus group (SBG) traditionally operated trunk routes between London and major Scottish cities, while other cities in England were connected by joint NE/SBG routes. Independent operators took a greater role than in England. SBG subsequently placed trunk routes between London and Scotland, and within Scotland, under the 'Citylink' company, which formed a similar role to NE in England and Wales.

#### 3.5. Impact of deregulation

The deregulation of express coach services under the 1980 Transport Act had immediate and dramatic effects; there was rapid growth in passengers carried until 1985 (Table 11).

From the mid-1970's the volume of passengers carried by NE had declined, with just over a million trips in 1980. The early 1980's saw a rapid growth, peaking at 15.4 million in 1985. National road traffic estimates produced by the DoT indicated a rapid growth in coach and bus vehicle km on motorways in the early 1980's; by 54% between 1978 and 1986, exceeding the growth rate for cars in the early 1980's. Since 1985 the number of passengers carried by NE has declined to a similar level to that in 1980. The initial phase of growth in long-distance express travel in the early 1980's was largely explained by a combination of higher frequencies on trunk routes, greater motorway running to raise speeds, and fare reductions of about 50% immediately upon deregulation, together with increased public awareness of coach travel.

The largest single source of traffic growth was from rail, and some of the coach growth of the early 1980's may simply have represented a recapture of traffic lost to rail in the late 1970's when BR was able to introduce a range of pricing innovations aimed at traditional coach users such as students and the elderly, which coach operators initially could not match. However, despite