Sbs Transit Swot Analysis

SWOT Strengths •Market leader in public bus services SBS owns majority of the bus transport business in Singapore with over 3000 buses. With increasing ridership over the past few years and the government’s plans to introduce new routes and more buses through the Bus Services Enhancement Programme, this strengthens the strong hold that SBS already has in the provision of bus services in Singapore. •Compliance with strict Standards Having been in the bus industry since 2001, SBS Transit has surpassed strict operating and quality of service (QoS) standards set by the Authorities.

SBS has also better compliance results than its only competitor, SMRT, in the recent Jun – Nov QoS results published by the Public Transport Council (PTC).

Weaknesses •Limited liquidity position Opportunities •Increase in tourists and ridership as population grows. Singapore only has 12 cars per 100 persons due to high costs of owning a car. Increase in population is positively correlated to ridership and with population still very likely to grow; there is the potential for ridership increase in next decade. •Shift in Government focus (Land Transport Master Plan)

Limited land area sees government focusing on making public transport the choice of mode of transport for majority in future. This is seen from increase in ERP charges and more ERP gantries.

In the future, may even see a shift of ERP gantries to GPS road charges. •Rail Transport Market Expansion With the recent awarding of Downtown Line to SBS and also the government’s plan to spend at least $40 billion to double Singapore’s Rapid Transit System (RTS) network by 2020, there is potential for SBS to increase their arket share in the market for rail transport. Threats •Rising fuel prices With the reduction in fare prices by the Public Transport Council and rising fuel costs, SBS faces erosion of their profit margins. Sharp increase in 27% of fuel and electricity costs in 2011 more than offset increase in revenue. •Recruitment of bus captains Difficulties in recruiting bus captains are mainly due to long, straining hours on the road and with rising affluence, lesser and lesser locals are willing to work as bus captains.

With more buses and bus routes to be introduced in the next few years, a shortage of bus captains threatens efficiency in SBS’ operations. •Tight regulations Being in the public transport industry means SBS is subjected to stringent regulations imposed by local transport authorities such as the PTC. Violations of these strict operating and quality of service standards translate to hefty fines, as seen from the recent $400,000 fine by LTA for NEL disruption