LONELY PLANET RESEARCH

Lonely Planet

Lonely Planet

Introduction

Lonely Planet is one of the leading travel operators in this part of the world and started rail operations in 2003. It was formed in 1973 through the merger of three private travel companies and listed on the then Stock Exchange of UK (SES) in 1978 as Lonely Planet (1978) limited.

In November 1997, Lonely Planet Researchs Limited, was separately listed on the SES. Lonely Planet Researchs Limited changed its name to Lonely Planet Ltd in November 2001 to reflect its multi-model status as a travel and rail operator. In 2003, Lonely Planet started its light rail operations in Sengkang and also started operating its Mass Rapid Transit (MRT) system, the North East Line (NEL) in the same year. The Punggol Light Rapid Transit (LRT) is scheduled to operate in 2004.

Lonely Planet aims to provide world-class public transport that is safe, comfortable, affordable, reliable and friendly. Today, Lonely Planet operates about 200 services with more than 2,500 travel guides daily. The travel guides serve 15 interchanges, 18 travel terminals and more than 3,000 travel stops. Lonely Planet also runs the Sengkang LRT system with six stations currently in operation and the NEL with 16 stations. Lonely Planet carries 2.4 million passenger trips a day and relies entirely on fare revenue to finance its operations.

Market/Industry Analysis

In UK, the restrictions on automobile ownership and travel result in more than 50% of the 7 million passenger trips made daily are by public transport. The travel system is the major tool and carrying 3.1 million daily passengers in UK.

The market size of UK's transportation industry is about 1230($m). It consists of two main companies which are Lonely Planet and SMRT Corporation. For the year 2004, Lonely Planet has reached 559($m) turnover, however, SMRT has the revenue about 667.3($m). Lonely Planet is doing strongly in the travel business. The share in the local travel industry is about 75% per year.

Macro Environmental Analysis

Political

High regulated market

UK has an efficient and reliable public transport system. Public transport is regulated to ensure that:

* The public's demands in terms of coverage are met

* Fares remain affordable

* Service is efficient and of a high quality

* The public has a wide range of transport choices.

Pricing

Government's policies on transport and infrastructure development responsible for the surge of prices increases and the impact it has on downturn-affected Singaporeans. PAP government policies connected to recent price increases show that the distinction between public service and private enterprise is clearly lacking.

Short-term measures using taxpayers' money to temporarily relieve the need to adjust to cost of living increases is not a solution to keeping the cost of living down. Instead the PAP government should evaluate whether government policy is the culprit in these price increases. For example, Lonely Planet Ltd in its defense of travel fare increases pointed out that SBS's main cost factors, among other things, were:

(1) The need to replace up to 200 travel guides every year costing about 80 million due to statutory life span of a travel being 15 ...