Transport for London could run out of money by the end of next week if it doesn’t receive support from the government, Sadiq Khan told BBC Radio London yesterday evening.

With tube usage down by 95 percent and bus usage down by 85 percent since the lockdown started, TfL has seen a massive decline in its ticket sales income.

Although many people have travelcards and would have paid in advance for travel they didn’t use, single ticket sales via Oyster and contactless represent around double the income compared seasonal travelcards, and that daily ticket sales revenue will have fallen off a cliff.

With most monthly travelcards not being renewed this month either, that’s a further hit to TfL’s finances.

The budget for this year was to be just under £4.9 billion from ticket sales, of which 58% was to be from the London Underground, 29% from buses and the rest from the mainline rail and other services.

The additional problem is that London Underground makes an operating surplus on its services, while buses make a loss, so the decline in tube travellers will have a far bigger impact on the underlying financials than had TfL been able to cut buses instead.

However, it was later clarified that the Mayor was referring not to literally running out of cash, as in nothing in the bank account, but reaching the preferred minimum that TfL likes to keep in its accounts as a cash balance, which is around £1.2 billion.

A spokesperson for the Mayor’s office stated that “This is sufficient for TfL to keep operating the city’s core transport and paying its staff while it is in constructive discussions with the Government on its financial future.”

That £1.2 billion float itself will be breached though around the beginning of May and TfL is still spending some £150 million a week in running its services, even as many have been cut back due to lack of staff who are self-isolating, or cut back due to a lack of passenger demand.

Transport for London has already stated that it is in talks with the government about its immediate financial situation.

Tagged with:

This website has been running now for just over a decade, and while advertising revenue contributes to funding the website, but doesn't cover the costs. That is why I have set up a facility with DonorBox where you can contribute to the costs of the website and time invested in writing and research for the news articles.

It's very similar to the way The Guardian and many smaller websites are now seeking to generate an income in the face of rising costs and declining advertising.

Whether its a one-off donation or a regular giver, every additional support goes a long way to covering the running costs of this website, and keeping you regularly topped up doses of Londony news and facts.

If you like what your read on here, then please support the website here.

Thank you

3 comments on “TfL warns of Coronavirus cash crunch
  1. Melvyn says:

    Given the massive reduction in both passengers and traffic perhaps bus services should be altered by extending some routes and withdrawal of others .

    Simply extend route 476 from Kings Cross to Oxford Circus and route 73 can be withdrawn the same applies if 149:is extended to Ponders End allowing withdrawal of the 349. There must be many routes that could be extended / combined allowing other routes to be withdrawn .

    A decision might also need to be made of systems like the DLR and Tramlink should continue operation or be replaced by buses ?

    • TfL don’t run the DLR, it’s run by KeolisAmey Docklands. If you wanted to save money, it could just switch to fully automatic mode, as it can run without the Customer Service Operatives.

      Quite why you would want to replace a service that can sit passengers in CV-19 sensible way with one that exposes people to road air-pollution, I don’t understand.

      In a similar way, the trams are run by FirstGroup.

Leave a Reply

Your email address will not be published. Required fields are marked *