Facing increasing competition, a slow economy and running an ageing fleet, Autopax has identified that a strategy change is needed to ensure the company can continue to grow in the future. Acting CEO, Bongani Kupe tells Enterprise Africa more about what the company has planned to revitalise SA bus transport.
Most of the world’s major economies have an established transport industry, acting as the backbone of the trade and development industries. It’s vital that people and goods can move from place to place, on time and uninterrupted. The movement of people is especially important as people are the drivers of business; the catalysts of commerce and the stimulants of economic success. But moving people is not an easy task; you can’t walk everywhere, flights and trains can be expensive, taxis are unreliable and costly, and if everyone used a car the environmental impact would be significant. So what about buses? You can get around 50 people on a coach; it’s comfortable, affordable and relatively efficient.
In the USA, Canada and Australia, Greyhound buses have become globally recognised; in the UK it’s National Express; in Germany there’s Postbus; Japan has the JR Bus Network, and South Africa has Autopax, operator of Translux and City to City bus services.
Moving people across this vast country is no easy feat. It’s almost 2000 km from Cape Town to Musina and a car journey across this route would take around 20 hours of non-stop driving which is unrealistic. Even smaller journeys are not easy. It’s around 620 km from Johannesburg to Durban, two of SA’s biggest cities, but a journey by car would take almost seven hours and a flight would cost in excess of R700, one way, combined with all of the inconveniences that go with airports.
Fortunately, through Autopax and its well-recognised brands, South Africa does have a quality bus and coach offering; one which has over the years built a reputation for quality by delighting South Africans and tourists as they move around this beautiful nation.
Autopax is a wholly-owned subsidiary of PRASA (Passenger Rail Agency of South Africa) and its main focus is long distance road transportation of passengers while following a mandate of consolidating market share and operating on a fully commercial basis, supporting rail operations through effective feeder and distribution services and also offering services to cities and municipalities in rural areas. It has recently entered into commuter market where its initial services comprise of eight contracts in the Gauteng Province.
The company currently operates more than 520 buses and the fleet is made up of commuter, semi-luxury, luxury and ultra-luxury vehicles.
Like its international peers, Autopax moves people across South Africa’s almost-800,000 km of road network. It has the biggest reach and coverage of areas in South Africa and crosses both urban and rural areas.
Translux is the luxury long distance scheduled inter-city operator, servicing more than 100 destinations throughout Southern Africa, and City to City provides semi luxury and no-frills regional bus transport service to various destinations across South Africa and Mozambique in its modern fleet, designed and built to world-class standards.
Acting CEO, Bongani Kupe tells Enterprise Africa more about Autopax’s history and how the company is looking to technology improvements to fend off the ever-growing threat of competition and demands for effective and efficient services in the modern day business bus operations.
“Autopax operates both long distance and commuter services in South Africa,” he says. “We are in the process of expanding into the SADC region – we currently operate to Mozambique but we have applied to operate to Lesotho and Swaziland and we hope that soon we will be able to go to Zimbabwe and Botswana. We get permits to operate those routes from a cross-border agency so at the moment we’re waiting for approval from the agency and we are hoping that before the end of the year we will have the permits and next year we can start operating those routes.
“Namibia is also on our list but it’s not a priority right now. Lesotho, Swaziland, Zimbabwe and Botswana are the first priority and when we’ve established ourselves firmly on those routes we will then look at others in the SADC region. The goal is to eventually cover most of the SADC region as there are many people from this region who work and reside in South Africa, and there’s a lot of trade between these countries and SA, so there’s a lot of movement of both goods and people around the SADC area.”
Autopax has the vision of being the leader in road passenger transport solutions and this vision is aligned with the vision of its parent company PRASA.
“We are a government owned company and were established as Autopax in 2009. Before that, we were owned by Transnet. When PRASA was consolidated in 2007, it then took over Autopax after its formation in 2009. We only recently started to do commuter services, last year.
“We are in the process of investing in technology in a big way. We are looking at our ticketing systems, we’re looking at the internet and apps and, because of the rail modernisation project that is underway, we’re looking at an integrated ticketing system that would allow people to travel seamlessly through various different modes of transport without a major effort,” adds Kupe.
ROAD BLOCKS
Because of the current economic climate in South Africa, with growth rates down and unemployment rates remaining high, the business environment remains challenging. Autopax, like any business, is exposed to these macro threats but has managed to deal with the situation by focusing its attention on the most popular profitable routes on its list and consolidating on those which are not as prevalent.
“There are some routes that fall off during the economic downturn but despite the situation, we have experienced increased demand on some routes so what we have done is to try and rationalise the operation and focus on those routes with more demand and try to operate efficiently on the less popular routes so as to not incur a negative impact on the bottom line,” says Kupe.
Challenges from other areas, away from the economy, have also been problematic for Autopax as Kupe explains: “In the last few years, the challenges we’ve been dealing with include increased competition in the market, the ageing of our fleet which is now seven years old and, of course, the downturn in the economy.”
Then, just last month, there were serious problems in various municipalities following political protests. “In Tshwane municipality where we have one of our biggest commuter operations, 19 of our buses were burnt due to political unrest in the area. We had 547 buses but due to political unrest in some of the municipalities, some of our buses were burnt and so now we have 527,” says Kupe.
And of course there is the competition, which is growing all the time. In 2013, Greyhound South Africa introduced its double-deck ‘Dreamliner’ coaches to the market, offering a ‘business-class experience’ with more leg-room, more comfortable seating, charge points and seats reclining to 150° with memory foam for sleeping passengers. The company now has more than 20 of these coaches operating between the country’s major destinations, and with other competitors also vying for market share, Autopax is looking at how it can effectively maintain and grow its position.
“We are in the process of putting together the whole recapitalisation strategy for Autopax and also looking at other areas where we can invest. Our fleet is almost seven years old and we’re hoping that we can recapitalise some of the components but the intention is to buy a new fleet so that we can service the commuter market in South Africa and the cross-border market. We’re hoping that we can recapitalise for the commuter market in the next year and then for the cross-border market the year after,” Kupe explains.
“We have the biggest fleet, we can reach areas that are not reached by other service providers, we have a big network as an organisation and we pride ourselves on the service that we provide. From the market point of view, we are poised to be the leader in the provision of these services across the country.
“We want to introduce technology that will take us to the next level in terms of apps, integrated ticketing systems and technology on our buses. We also want to recapitalise the fleet and go green. Technology is changing; there’s a whole green economy now; buses can be powered by gas or electricity, and we are focussing on being as economical as possible,” he adds.
Currently, Autopax has a focus on using the ‘greenest’ fuel PPMs and Kupe says that gas powered buses (already popular in Europe, North America, Australia, India and many more countries) could be the next step in the green revolution. “The next layer is to look at gas fuelled buses and then electrical buses, but that hasn’t really happened in South Africa yet – we still have two to three years before we will get into that sector. When we recapitalise our buses, the first consideration is to go green so that we can contribute to the reduction of emissions as that is one of the policies of government and they want us to follow that in every process that we do,” he says.
Although there are many naysayers when it comes to environmental discussion, the Acting CEO is happy and proud to be part of a movement which is set to help future generations.
“When people are not used to things, there are issues with people arguing over what is best but the government has taken this policy so that we can preserve the environment for our kids and I think it’s something that we need to applaud even though people will shy away from it until there is an established method of doing things. We will certainly be going green; for us, it’s not an if or a but, it’s a when,” he says.
POLE POSITION
One of the key strong points for Autopax, something which separates it from the chasing pack, is its employee base. “We have almost 1400 employees,” says Kupe. The company lists human capital development as one of its top five strategic objectives and Kupe says that various different roles require different skills profiles and as such, lots of training and development is needed.
“On the driving side, we have detailed programs which must be completed. On the sales side, where people are regularly handling money, there is lots of training and generally training and upskilling people is a big target for us so that we can improve productivity.
“In SA, we do need to start thinking differently. Every country has challenges but ours is on the skills side, it’s certainly a major challenge but I think it’s something we can improve. We need to think differently so we are not stuck doing things the way they were done before. We need new methods and new skills so that we can face the new challenges that will present themselves to us. There are many graduates out there, and many skilled people and so we need to create the opportunities that allow them to help grow the economy,” says Kupe.
Also a strong attribute in the Autopax profile is the fact that it is part of PRASA, a government owned organisation that gives it increased clout in the industry and helps to offer complementary services for the benefit of all. “We are trying to collaborate with other state owned entities to see whether we can provide cross-border services that can benefit and add-value to our customer’s operations. This will also assist us in expanding our footprint so that we are able to create more reliable outlets outside the country,” says Kupe.
And as the company expands, new leadership will bring new ideas and enthusiasm. With Kupe only set to remain in his role for a fixed period, the appointment of a new CEO will bring further stability to that which Kupe has already installed.
“I’ve been here for 11 months, I sit on the board of Autopax and while there was a gap I was asked to come in and assist in terms of operations as I have a transport background, I’ve been in the industry for more than 20 years. We are in the process of looking for a CEO and we feel there are major opportunities out there so I will assist the board with an appointment of a new CEO by implementing the correct infrastructure that will help the company forge ahead.
“We hope this appointment will happen in the next three or four months as we want the new CEO to start by April 1stnext year.
In this country, approximately 70% of people are reliant on public transport (bus, train, taxi) in their daily lives. Whether it’s for going to school, attending work, accessing services or for social use, as one of the most reliable, efficient and cost-effective elements of the mix, buses remain hugely important to South Africa. Through Autopax, South Africa has an operator that is ambitious and hungry for development and its expansion plans can only lead to positive outcomes for all stakeholders.