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.