Luxury coach operator Knutsford Express Services Limited will puts its Drax Hall terminal into operation by next summer and plans to open second courier hub before year end, says CEO Oliver Townsend CEO.
The company, which operates a cross-country service connecting commuters to urban centres, is adding a premium service – business class – that will both provide more luggage space as well as room for passengers to ride in physically-distant comfort, at 50 per cent higher rates than regular commuters pay, Townsend told the Financial Gleaner.
The company during the pandemic added three buses to its fleet that will facilitate the new premium service.
The St Ann-based Drax Hall facility will be Knutsford’s second major hub, in addition to its base in New Kingston, but the first to incorporate commercial space from which the bus company intends to earn rental income.
The Drax Hall Super Hub and Commercial Complex holds 15 storefronts spanning 23,000 square feet of leasable space. Knutsford Express will spend about $140 million this financial year, mostly to complete the hub.
“We will start making money from the centre from July,” Townsend said, when asked the timeline expected for the company to start reaping returns from he investment.
Knutsford has otherwise been expanding its package courier service, having started during the summer to do package pick-ups from businesses in New Kingston. Townsend said that the company will start offering a second courier centre on the Washington Boulevard, also in Kingston, this months, to focus more on individuals rather than businesses.
Since the pandemic, Knutsford’s passenger volumes have fallen by more than two-thirds, leading to a dramatic fall-off in revenue.
The fall-out continued even after the economy began reopening at the start of June, ending a near three-month lockdown of the economy to contain the coronavirus. Specifically, in its first quarter ending August, Knutsford recorded a 63 per cent drop in revenue to $121.8 million from $324.5 million a year earlier.
The company’s expenses in the June-August period outpaced its top line inflows, leading to net losses of $25 million. The year prior, the company made a profit of $47.8 million in the three-month period.
Townsend described the quarter as the worst in the company’s history and attributed the decline to the effects of the pandemic.
He adds that up to October his outlook had been positive, in line with expectations of a rebound in travel to around 50 to 75 per cent of 2019 levels, during the peak winter tourist season. But it’s looking like the hospitality sector may have been too optimistic. Travel has not rebounded to the degree expected because of continuously rising COVID cases in markets that Jamaica would have been looking to for tourist business.
Townsend said he is less optimistic now and more measured in his expectations, the caveat being whether the new COVID-19 vaccines set for release on the market in the coming days in the United Kingdom and Russia will translate to increased confidence for travel.
“We know we will survive, and there are certain short-term aspects of our business that will put us in a better state going forward. And let us hope that people will take to the vaccine, and people will feel more comfortable to travel. When that business comes back, we have all the resources to take advantage of it,” he said.