The cost of COVID-19 on London’s public transport could reach £500million according to regulator sources.
Transport for London (TfL) issued the update today on how the COVID-19 virus has affected its passenger numbers and how it intends to utilise its reserves to manage the forecast initial financial impact. This assessment has been based on Government scenarios for the impact of the virus on households over a number of weeks.
Officials from TfL have admitted that since the growing number of firms and individuals have gone about changing their travel behaviour, the number of people travelling on public transport has fallen fast.
A greater number of people now working from home has also led to a reduction in passenger numbers in the last week to around 19% on the Tube and 10% on buses compared to the same week the previous year.
This is made up roughly equally of fewer people travelling and those travelling making fewer journeys.
TfL has identified the key drivers of the reduction to be:
a significant reduction in visitors to London, visible through the traffic on the Tube connecting the airports and central London;
firms asking staff to work from home as part of their resilience planning;
and continued underlying softness of demand, especially off-peak. This is likely to relate to consumers remaining cautious about their expenditure given the subdued economy and now the impact of COVID-19.
TfL's current forecast, based on government scenarios, suggest that this could be a reduction in passenger income of up to £500million.
Simon Kilonback, TfL's Chief Finance Officer, said: “Our best forecast, based on government scenarios, is that the financial impact of the coronavirus could be up to £500million.
“We manage our finances prudently, and have reduced our deficit hugely in recent years. This means that we can manage the impacts on our passenger numbers and finances that are currently envisaged. But, given the nature of the situation, we will be looking to the Government to provide appropriate financial support.”
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