A recent analysis of ABC Transports’ financial statements, a major player in Nigeria’s luxury bus (aka Coach) industry, reveals a grim reality that has been haunting operators in the country.
ABC Transport, known for being a pioneer in the transportation by coach, or luxury bus, sector in Nigeria, has suffered a substantial decline in revenues, plummeting by over 30% in the past four years.
The company’s coach division has been consistently reporting losses since 2015, and its contribution to overall revenue has dwindled from 13% in 2019 to a meagre 8% in 2022.
These challenging times for the luxury bus transport business have been attributed to a combination of factors. The high cost of living in Nigeria, coupled with a growing preference for minibuses, has significantly eroded the patronage of luxury buses.
Additionally, the rising concerns over kidnapping and banditry have engendered fear among potential passengers, making them hesitant to opt for luxury buses, which have become vulnerable targets for criminals.
Once regarded as the preferred mode of transportation for long-distance travel, luxury buses have lately lost their appeal to minibuses that offer faster and more frequent services.
This shift in preference has been particularly notable in recent years, resulting in dwindling passenger traffic at major luxury bus terminals in Lagos, where interstate routes are prevalent.
As a consequence, luxury bus operators have been forced to scale down the number of trips they undertake, while minibuses enjoy a surge in patronage.
Another major challenge faced by luxury bus operators in Nigeria is the deplorable state of the country’s roads.
With most roads in a state of disrepair, passengers endure long, bumpy, and uncomfortable journeys, which further deters potential travellers who are already concerned about their safety in light of prevailing security threats.
The repercussions of these challenges have led to many luxury bus operators struggling to remain solvent. The decline of the luxury bus transport business mirrors the broader economic challenges afflicting Nigeria.
The transportation sector, as a whole, has been hit by multiple economic crises, including insecurity issues, high maintenance costs, and a significant decline in passenger patronage due to the prevailing harsh economic realities.
ABC Transport’s own results underscore this precarious situation. Passenger data from the company reveals a stark contrast between the number of passengers travelling on coaches versus those on shuttles and sprinters.
In 2019, 98,106 passengers travelled on coaches compared to 214,836 and 137,424 passengers on shuttles and sprinters, respectively.
However, in 2021, these numbers took a nosedive, with only 59,752 coach passengers, and 144,320 and 77,136 passengers on shuttles and sprinters, respectively.
As Nigeria grapples with these challenges, the luxury bus transport business serves as a poignant symbol of the broader economic and security struggles confronting the nation.
With operators battling to keep their wheels turning, it remains to be seen whether the industry can regain its former glory in the face of these pressing headwinds.
Operators Struggle as Luxury Bus Patronage Declines
Olumide Tewogbola, Assistant Manager at GUO Transport Company Limited’s Jibowu Branch in Lagos, has provided exclusive insights to Nairametrics, shedding light on the significant factors contributing to the drop in luxury bus patronage in Nigeria.
He points to the preferences of the younger generation, concerns over insecurity, and escalating maintenance costs as the primary reasons behind the decline.
According to Tewogbola, the new generation of Nigerian youths, constituting a substantial percentage of travellers, now favours minibuses and Seina cars over luxury buses.
The perception is that luxury buses are slower than minibuses, resulting in delayed arrival at the destination.
Additionally, travellers prioritize comfort, which minibuses offer, despite their higher fares compared to luxury buses.
- “Youths now view travelling with luxury buses as archaic, partly because they are slower than minibuses. For instance, if both buses leave Lagos for Onitsha at the same time, the minibus will get to the destination hours before the luxury bus arrives.
- “Aside from ensuring early arrival, comfortability is also one of the factors driving travellers to patronize minibuses, although minibuses’ transport fares are more expensive than travelling with luxury buses,” he explained.
He further reveals the disparity in transport fares, citing that the cost of travelling to Enugu using luxury buses is as high as N27,000, while minibuses charge only N16,000 for the same destination.
The fear of insecurity is another significant factor driving people to choose minibuses over luxury buses.
There is a pervasive belief among Nigerians that luxury buses are more susceptible to kidnapping and robberies, particularly during night travel.
Fuel costs also contribute to the shift in preference, as luxury buses require significantly more fuel compared to minibuses.
A luxury bus of 33 seaters consumes around N100,000 worth of diesel for a trip to Onitsha, while a minibus only requires N50,000 in fuel.
Mr. Nelson Adebayo, Manager of Ekeson Motors Limited, Jibowu, Lagos, further explains the reduction in luxury buses on Nigerian roads.
He attributes this decline to the high cost of maintenance and the lack of capital to acquire new luxury buses.
Adebayo estimates that the number of luxury buses on the roads has decreased by approximately 50%.
He acknowledges the profitability of night travel businesses but highlights that insecurity remains a significant concern, particularly in areas like Zamfara, Sokoto, and Kaduna.
To alleviate passengers’ fears, strict safety protocols are maintained, including detailed passenger information and connections with security agencies.
- “The greatest challenges facing us today are the glaring issues of daunting insecurity, the great period of economic depression resulting in the unprecedented period of low passenger patronages,” Adebayo said.
- “He estimated that the number of luxury buses plying the road has reduced by about 50% and highlighted the profitability of night travel businesses but emphasized that insecurity remains a major concern, especially in places like Zamfara, Sokoto, and Kaduna.”
- “To allay passengers’ fears, we maintain strict safety protocols, including detailed passenger information and connections with security agencies,” Adebayo stated.
Apart from insecurity, Adebayo emphasizes the soaring cost of maintenance. The price of spare parts for luxury buses has surged by more than 80%, making it financially unfeasible for transporters to continue with high-capacity buses.
The exorbitant cost has prompted many operators to turn to more affordable options like minibuses and Seina cars.
- “Apart from the drop in patronage due to insecurity, the cost of maintenance is high on the roof. The cost of spare parts for the maintenance of the luxury bus has increased to more than 80%. “The G7 luxury bus which we used to purchase at N50 million has gone up to N250 million. The cost is too high, and that’s why transporters are now resorting to buying affordable buses which are the minibuses and Seina cars,” he added.
Despite the challenges, Adebayo notes that businessmen and women still utilize luxury buses for their high capacity to carry loads of passengers, mostly during night travels. However, he warns that if the situation does not improve, some transporters may be forced to shut down, leading to increased unemployment.
The future of the luxury bus transport business remains uncertain.
Adebayo suggests that addressing security challenges and improving the state of the roads may offer a glimmer of hope for the industry’s recovery.
However, substantial efforts from the government and stakeholders are required to revitalize the struggling luxury bus sector.
Luxury Bus Drivers Speak Out on Industry Challenges
In the bustling Ifesinachi Motors terminal in Mile 2, Lagos, a veteran Luxury Bus driver, choosing to remain anonymous, reveals the stark contrast between the past and present.
Once, the company loaded 12 luxury buses daily to various destinations nationwide, but now, that number has dwindled to a meagre four or less.
The decline, according to the driver, is primarily due to the pervasive insecurity plaguing the industry and the nation at large.
He asserts that while the drivers have adapted to managing the challenging conditions, passengers bear the brunt of the uncertainty.
To ensure passenger safety from criminals, drivers adeptly navigate through dangerous roads.
- “I think the business is dying because of insecurity. We, as operators, know how to manage the situation and cope with the discomfort, but not our customers.
- “While the drivers have learned to navigate and cope with challenging conditions, the passengers, unfortunately, bear the brunt of the uncertainty. In the face of danger, drivers normally manoeuvre through the roads to ensure the safety of their passengers from criminals.
- “By communicating and sharing intelligence, we stay ahead of potential threats. However, this comes at a price – longer waiting times, sometimes stretching to one or two hours or more, before continuing the journey.
- “Naturally, this inconvenience does not appeal to many passengers, leading to a shift towards minibuses or even haulage services rather than passenger travel.
- “This shift also affects the cost of transporting goods, as vehicles often return to base empty.”
However, this comes at the cost of longer waiting times, sometimes stretching to one or two hours or more, before continuing the journey.
This inconvenience has pushed many passengers to shift towards minibuses or even haulage services, further impacting the cost of transporting goods, as vehicles often return to base empty.
Jonathan Ogoh, another experienced driver in Alaba, Lagos, echoes similar concerns.
He emphasizes the challenges faced by drivers plying highways that feature deplorable road conditions, posing significant risks to travellers.
Certain areas like the Enugu-Onitsha axis for Southeast travellers and the Okene and Obajana in Kogi State, and the Osun axis for Abuja-bound travellers, exacerbate the impact of insecurity on night travel businesses.
- “Among the worst areas for Southeast travellers are the Enugu-Onitsha axis, and for Abuja-bound travellers, the Okene and Obajana in Kogi State, and the Osun axis, which heightens the impact of insecurity on night travel businesses,” Ogoh said.
Ogoh expresses worry over the declining number of passengers willing to travel at night via luxury buses, largely due to unpredictable security situations and poor road conditions.
What was once a routine loading of six to seven luxury buses at night has become increasingly difficult, with sometimes only one bus departing due to these challenges.
Extended bus journeys lasting two to three days impose a considerable financial burden on the operators, necessitating fare increases to sustain operations.
- “What used to be a routine loading of six to seven luxury buses at night has now become very difficult, with sometimes only one bus leaving due to these challenges. Extended bus journeys, lasting two to three days, impose a significant burden on costs, necessitating fare increases to sustain operations,” Ogoh added.
Transport fares have risen significantly due to a combination of insecurity challenges, bad roads, and the recent removal of fuel subsidies.
For example, the journey from Lagos to Onitsha via a luxury bus now costs N17,500, a sharp increase from the previous N10,500.
The escalating costs have compounded the challenges faced by luxury bus operators, making it increasingly difficult for them to maintain profitability and operate efficiently.
Passengers’ Voice Apprehension over Luxury Bus Travel
At the bustling Okeyson terminal in Mile 2, Lagos, Deborah Chukwudi, a passenger bound for Aba, expresses her deep fear of embarking on a night journey by luxury bus.
With incidents of banditry and kidnapping prevalent, Chukwudi shares her anxieties with Nairametrics, relying on the power of prayer for protection throughout her trip.
- “I have no other option but to undertake a night journey; urgent family matters cannot wait for a minibus trip tomorrow. I pray for God’s guidance as I am very apprehensive about travelling at night due to security challenges,” she shares, highlighting the weight of uncertainty on her mind.”
Usman Bida, another passenger travelling from Jibowu, Lagos, to Kano, underscores the necessity of his night travel, despite acknowledging the inherent risks.
He recounts past experiences of armed robbery incidents along the way, leaving a lingering shadow of fear even in the absence of recent incidents.
- “Although my recent journey from Lagos to Kano was without incident, the shadow of fear remains, as I recall past experiences of armed robbery incidents along the way.”
Joseph Nnabuike, a bank staff journeying from Alaba, Lagos, to Port Harcourt, Rivers State, via a Chisco minibus, strongly advises against night travel.
He points to the declining number of passengers, increased journey durations, and heightened fear on the roads as clear indicators of the urgent need for government intervention in addressing security concerns and improving road conditions.
- “Only through concerted efforts can the industry hope to regain its former glory and ensure the safety and confidence of both operators and passengers alike,” he emphasizes, urging immediate action to tackle the pressing challenges faced by luxury bus operators and travellers.”
As passengers like Chukwudi, Bida, and Nnabuike share their apprehensions, it becomes evident that Nigeria’s luxury bus industry is facing an uphill battle to restore trust and safeguard its future.
Addressing the security concerns and road conditions is imperative to instil confidence in travellers and reinvigorate the once-thriving luxury bus business.