...Regulatory Risk for Regional Bus: The UK local bus market outside London faces medium- term risks from the potential regulation of bus services in some local authority areas. A conversion to a franchised service model, similar to London's, could lead to a reduction in margins. We estimate that on average, operating margins for franchised bus services would be around 3% lower than those of deregulated services (without adjusting for leasing expenses). Outlook for Bus Operations Stable: Local Transport Authorities (LTAs) have had the option to introduce franchised bus services since the Transport Act of 2000. Until now, only the North East Combined Authority (NECA) has tried to introduce a franchised services model, which the Quality Contracts Scheme Board (QCSB) judged as not meeting the conditions required. Fitch Ratings therefore does not see an imminent risk to incumbent bus operators, as it will take at least two to three years from conception to implement a QCS in any local authority....
