Friday, November 23, 2012

Transportation in Focus: Attiko Metro S.A.

Part two of a series on transportation in Greece. Attiko Metro runs the Athens metro system. The table below gives the basic operational and financial numbers (data from ELSTAT, Statistical Yearbook of Greece 2009-2010, 405—406, here).

From 2005 to 2009, the company carried 5.4% more passengers against a 7.2% increase in kilometers run, leading to a slight decline in utilization. Both figures, however, fell in 2009; in 2005—2008, the number of passengers grew by 11% and kilometers run by 15.7%.

Revenues increased by 17%, driven by a 15.4% increase in sales of tickets and passes—of which, ticket validations decreased but monthly passes rose by 42%. Metro thus made its revenues more permanent and relied less on ticket-by-ticket sales. Revenues per passenger traveled rose by 9.5%.

Expenditures have two parts: system rent and other. System rent depends on profits—if the company makes profits, it makes payment towards the system (in the English translation system rent includes the words "interest payments"). Expenditures also exclude investment in new lines and stations.

To understand profitability, look at expenditures excluding system rent: from 2005 to 2009, these rose by 64% (+€44 million). Of that increase, 70% came from higher spending on personnel and wages (+€30.4 million). Another 8% came from more money for cleaning and security.

The increase in wages came both from more personnel and from higher wages. The number of people working at Attiko Metro rose by 30.6% from 2005 to 2009, with the largest increase in 2009. Office clerks (including ticket sellers) and maintenance staff rose accounted for 75% of the increase. Since overall spending on wages rose even faster, the cost per employee increased by 32% in 2005—2009, or 2.6 times the rate of inflation.

In sum: From 2005, when Attiko Metro paid almost €11 million in system rent, in 2009 it lost €20 million without any system rent—a net change of almost €30 million. The drop in profitability was not the result of lower revenues (revenues rose) but of higher costs: the company had 30% more people in 2009 than in 2005, and costs per employee rose by 32%, 2.6 times the rate of inflation.

1 comment:

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