Canada Bus Operator

The following information could be provided to the interviewee if requested:

• The company is in a tight cash position
• Fuel is the major cost for any bus transport operator
• Due to insufficient monetary resources, the firm has not been able to upgrade to the latest machines, infrastructure, etc
• The firm has substantially invested (real estate) in terminals
• Routes can be classified into three types: short, medium, or long. More than 50% of the revenue comes from long routes
• The last CEO focussed a lot on the top line. For instance, he started the "anywhere pickup" plan

The candidate should ask for more background information on the case.

The candidate should use the profitability framework and focus more on costs.

• Fixed costs: Buses, terminals, salaried employees, etc
• Variable costs: Fuel, contractual employees, maintenance, etc

• Unprofitable routes should be identified and scrapped or scaled back
• Bus route fleet optimization could be performed to improve efficiency
• Fuel contracts for protection against fuel price fluctuations
• Lease new equipment to improve fuel efficiency and decrease maintenance costs, downtime
• Instead of "anywhere pickup", freeways could be utilized to improve schedules

Additionally, extra service offerings could be realigned with customer needs. For example, seats with extra legroom could be charged for.

The company should scrap the unprofitable routes, perform bus route fleet optimization and lease new equipment to improve fuel efficiency and to decrease maintenance costs.