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RedBus lost Rs 1,000 crore GMV during lockdown, industry lost out on 75 million tickets

RedBus lost Rs 1,000 crore GMV during lockdown, industry lost out on 75 million tickets

RedBus lost Rs 1,000 crore GMV during lockdown, industry lost out on 75 million tickets
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By Mugdha Variyar  May 29, 2020 5:11:23 PM IST (Updated)

The bus travel industry lost out on about 75 million tickets during the nationwide lockdown, with RedBus alone seeing a loss of GMV of over Rs 1,000 crore on its platform over the past two months, CEO said.

The bus travel industry lost out on about 75 million tickets during the nationwide lockdown, with RedBus alone seeing a loss of GMV (Gross Merchandise Volume) of over Rs 1,000 crore on its platform over the past two months, chief executive officer Prakash Sangam told CNBC-TV18

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The sector is now asking the central and state governments to bring clarity on inter-state bus travel which is yet to take off despite air travel being allowed. The central government had left it to states to mutually agree on interstate travel, and that decision has not come through for the bus travel sector, said Sangam.
"Interstate bus travel has not resumed at all. It is difficult when the decision-making is left to many states. We request the central government to give clarity to the industry on resuming bus travel," Sangam told CNBC-TV18 in an interview.
He added that intrastate travel has also begun in a limited manner, mainly in Karnataka, with some operations in Andhra Pradesh, Assam and Gujarat.
Bus Travel Industry Loses Rs 5,200 crore
Given zero bus travel during a large part of a the lockdown, RedBus lost out on 15 million tickets that it was otherwise expecting in the last two months, Sangam added.
“RedBus saw 2,31,000 tickets booked every day in Q3 FY20. We see more business during the months of March and April. So our estimate is that we lost 15 million tickets worth more than Rs 1,000 crore in 60 days of lockdown on RedBus alone ," he said.
"RedBus has a market share of 20 percent in private and public bus travel put together. That means the whole industry lost out on 75 million potential tickets worth over Rs 5,200 crore," the CEO said.
While the average ticket price in the industry is Rs 700, RedBus said the average price on its platform for public and private bus travel together is a little higher at Rs 800. Bus operators are hoping that inter-state travel is resumed soon and are putting in place Standard Operating Procedures (SOPs) for travel.
Bus travel will now entail temperature checks before the journey, sanitisers placed in the bus and social distancing by keeping every second seat empty.
Bus Operators Seek Tax Relief
With the huge losses in revenue, bus operators are hurting during lockdown and are seeking tax relief from the government.
"The bus industry pays taxes per seat on a prepaid basis. However, given that there was no travel during the past two months, the industry is asking that the taxes should be adjusted against outstanding dues," Sangam said.
Bus operators also need tax relief on seats given that social distancing norms will entail many seats are kept empty, he added.
The RedBus CEO added that most of the bus operators on the platform have taken an EMI moratorium as a temporary cash flow relief. RedBus had also started pre-registration of bus tickets as relaxations were to be lifted, and has seen 0.5 million pre-registrations on RedBus so far.
The top clusters of demand for bus travel on the platform are between Telangana- Andhra Pradesh, between the southern metros of Bengaluru-Chennai-Hyderabad, for intrastate travel in Tamil Nadu, Maharashtra, and for travel from Delhi-Uttar Pradesh and Delhi-Bihar.
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