The UK government set aside £226.5mln in funding to support bus companies in England to help ensure services as Coronavirus (COVID-19) restrictions are lifted but passenger numbers remain lower than normal.
Taking effect from September and running through to next April, the subsidies are for private bus operating companies outside London and follow on from an existing support package.
The Department for Transport announced the new package today.
It also said it received 35 applications for the new Zero Emission Bus Regional Areas (ZEBRA) scheme, where local transport authorities must compete for a share of a £120mln pot of government funding to support the roll-out of zero emission buses across England.
In March, the government published its new national bus strategy, promising to invest £3bn to try and encourage more people to use the bus rather than their cars, with “more frequent, more reliable, easier to use and understand, better coordinated and cheaper bus services”.
Go-Ahead Group PLC (LON:GOG) welcomed the new funding package, with CEO David Brown saying, "the support we have received from government over the last 16 months has enabled us to continue to provide vital services to communities, including essential journeys during the various lockdowns."
He said passenger numbers have risen to around 65% of pre-COVID levels.
Broker Peel Hunt said: "This removes the risk of a cliff edge in revenues and allows for a return to a level of commerciality with the potential for upside to margins.
"Combined with the shift to low-risk National Rail Contracts (NRCs), we believe this should be extremely positive for Go-Ahead in reducing revenue risk before commercial demand has recovered."