Revenue forecast to rise

Bus and light rail revenue is predicted to rise over the next five years

Revenue forecast to rise
Industry revenue is forecast to rise steadily over the five years

Industry revenue is forecast to rise steadily over the next five years, the recently released Urban Bus and Tramway Transport in Australia Market Research Report shows.

Industry revenue is forecast to rise steadily over the five years through 2013-14, growing by a compound annual rate of 5.3 per cent to be worth $5.5 billion.

Revenue is expected to increase 4.7 per cent in 2013-14.

IBISWorld Industry Analyst Caroline Finch says despite privatisation, the role of government in funding infrastructure and managing operating contracts remains significant.

Over the past five years, the industry has grown substantially as demand from passengers has lifted and governments have invested in expansion.

Bus infrastructure expansion has been an attractive choice for state governments looking to develop public transport network coverage, as has light rail, although to a lesser extent.

When bus networks are expanded, the industry directly benefits as new contracts for operation are tendered for new routes.

A number of push-and-pull factors have drawn more commuters onto bus and tram networks and these are expected to continue to drive commuter numbers up in the next five years.

 "New vehicles and routes have increased the appeal of industry offerings," says Finch.

"Services have been expanded and rebranded in major capital city markets in the past five years."

The industry also has a low level of market share concentration, according to the report.

Concentration is expected to increase in the next five years as the size of contracts for public transport services increases in states such as New South Wales and Victoria.

Further acquisitions are also expected to increase concentration.

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