Metrolink bosses can't rule out fare hikes and service cuts if the Government fails to continue emergency Covid funding when the pot runs out in March.
Due to plummeting passengers during the pandemic, the network has largely relied on Government funding, with £120.2m allocated for the period of March 2020 to April 2022.
Transport bosses are currently locked in negotiations with the Department for Transport in a bid to secure funding beyond this point.
However, Metrolink boss Danny Vaughan has tonight told the Manchester Evening News that if support is not forthcoming, service cuts and an increase in fares - which have been frozen for the last two years - could be on the way.
The Head of Metrolink said that rocketing electricity prices alone will lead to a £6m increase in operating costs next year, with wholesale losses of up to £40m predicted when other costs and passenger decline are factored in.
It means Government support is vital.
Mr Vaughan told the Manchester Evening News : "The issue we are facing is that even if we do nothing our costs go up substantially.
"It all depends on what happens to passenger numbers and revenue but we are anticipating that even with strong revenue growth there will be a shortfall of up to £40m."
As is the case for so many businesses, it's a sad fall from success for an organisation widely regarded as an industry leader, and which in pre-Covid times made enough of a surplus to pay for all operating costs and invest in the network.
Mr Vaughan added: “Our budgets are wiped out because of Covid.
“We’ve always been proud masters of our own destiny so having a conversation and putting our hands out to Government has been unusual for us, although we are very grateful for what we received - and we do need more.
“We are talking to the Department for Transport and their officials are sympathetic because they do want strong growth in public transport.
“What they recognise and what we’ve been saying to them is we won’t be able to regrow the economy and level up the north in Greater Manchester without a very strong public transport network and in order to maintain that they have to help us out with some level of subsidy at least for the next year.”
Despite this understanding, he added: “There are no guarantees, as I talk to you today, that we will get anything from them beyond March 31.”
The consequences, he said, could be price rises and service cuts.
He added: “We don’t want to, in fact we’d like to increase services and capacity and we think improvements to the service are the only way to grow patronage. Cuts would be counter-productive.
“But of course we have to consider them if we can’t make ends meet and all operating costs.”
This could include, for example, the continuation of a pared-back Ashton service, where the operator is yet to reintroduce a six-minute frequency since it was cut in the pandemic.
On fare rises, Mr Vaughan said prices had been frozen fo two years, adding: “Again, we don’t want this as it’s counter-productive to passenger growth, we want to encourage the use of public transport - and if you compare our prices to, for example, London, we are already at the higher end of the spectrum.
“But again, if we don’t get anything from central government we’ll look at what we do with fares and what we do with our services.”
He said they were already looking at ‘all aspects’ of the business to see where savings could be made, including in energy costs.
Asked about the possibility of redundancies, he said these were ‘highly unlikely’.
He added: “We are carrying on a dialogue with Government and I’m hopeful that we get some level of subsidy because Metrolink is hugely important to Manchester.”
Throughout the pandemic, Metrolink has had fluctuating passenger numbers.
After plummeting during lockdowns, last year, as restrictions lifted, they rose up to around 80pc of pre-Covid levels but have come back down to around 50pc on weekdays.
They are now looking to be rising again and when restrictions lift next week, demand will likely get a boost.
However, it’s accepted by transport bosses that Covid has changed many lifestyles for the long-term, with working from home now a fixture for many former commuters.
“Even when restrictions were lifted last year the commuter market had fallen substantially. We were seeing encouraging growth in the leisure market on Saturdays and Sundays.
“Really, the future of the network depends on passenger recovery.”
As with all sectors, staffing has also been a problem, with recruitment, training and attendance by existing staff members compromised by the pandemic.
In mid-December, for example, 56 drivers, or 13pc of the workforce, were absent.
Staff shortages have also affected performance, according to a report this month, which said ‘most cancellations are due to driver availability’.
New Year’s Day was a particular low, with services forced to stop at 5pm on the Ashton, Airport and Eccles lines in order to move all available staff on to the most popular routes.
However, Mr Vaughan said they are ‘over the worst’ of staff absence caused by Omicron, with performance also improving as a result.
John Moorhouse, secretary of regional watchdog TravelWatch NorthWest, said they do fear a cut-back in services for passengers.
He said: "Our concern is it's going to take a while for people to get fully back to using trams and buses and we don't want to see any service cuts in the meantime which will be bad news for passengers."
A DfT spokesperson said: “We have provided unprecedented support for transport in Greater Manchester during the pandemic, including our £1.5bn Coronavirus Bus Service Support Grant, and ongoing £226.5m Bus Recovery Grant. The Metrolink, meanwhile, has had over £120m in support.
“We continue working with the bus and light rail sectors to understand the potential challenges once funding ends."
