Canada Bus Operator

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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.

Answer 1: Passenger load factor or load factor could be calculated to measure the capacity utilization of the bus transport service.

Answer 2: The company should compare the following:

• Operating costs per route
• Competition
• Kind of potential customers that use these routes and if they are likely to be the riders of the company's buses
• Whether the company's infrastructure could support the new routes