Edinburgh Trams Report £10 Million Loss Despite Record Passengers

Edinburgh Trams reported a significant net loss of nearly £10 million for the fiscal year ending in 2024, despite achieving record passenger numbers exceeding 12 million. The reported loss of £9,645,644 brings the total losses since the tram system’s inception to over £64 million. This marks the seventh consecutive year in which the tram service has operated at a loss.

Financial reports indicate that the tram service generated £28,815,444 in revenue during this period, with remarkable days such as June 8, 2024, when the system recorded its highest daily passenger count of 74,401. This spike coincided with concerts by Taylor Swift at Murrayfield Stadium. Over the course of the three-day Eras tour, more than 250,000 passengers utilized the tram service, with all 27 trams in operation—a first for the company.

Operational Challenges and Financial Burden

Despite these successes, Edinburgh Trams continues to struggle financially, having not turned a profit since 2017. The service has incurred losses of £7.62 million, £9 million, £8.8 million, £8.7 million, £10.9 million, £10.3 million, and now £9.6 million. Since its launch a decade ago, the trams have achieved profitability only twice, with a profit of £250,000 in 2016 and £1.6 million in 2017.

A substantial factor contributing to the ongoing losses is the annual asset fee imposed by Edinburgh City Council, which has charged £8.5 million annually since 2018. This fee is intended to account for the additional borrowing costs associated with the cost overruns on the original tram line, totaling £59.5 million since its implementation. Critics, including Sue Webber, the Scottish Conservatives’ transport spokeswoman, argue that these losses are detrimental to local taxpayers who have already borne significant expenses related to the tram project.

Webber stated, “These staggering losses will be a bitter pill to swallow for Edinburgh residents who were already hit with a final bill of over £1 billion for the tram project. Taxpayers were told this project would eventually pay for itself, but it is still continuing to bleed money.”

Future Plans and Community Impact

In response to the financial situation, Stephen Jenkinson, convener of transport and environment at Edinburgh Council, emphasized the broader value that the tram service provides to the city. He noted that the trams offer some of the cheapest fares in the country and were recently awarded UK Transport Operator of the Year at the National Transport Awards 2024.

Jenkinson remarked, “Our aim is to improve connectivity and encourage a shift away from private car use to more sustainable transport options. The successful completion of the line to Newhaven in 2023 has already brought significant economic, social, and environmental benefits to Leith, north Edinburgh, and to the city as a whole.”

Looking ahead, the council plans to expand the tram network further, with a consultation set to launch next month regarding a new north-south tram line between Granton and the Edinburgh Royal Infirmary. Jenkinson highlighted the importance of this development, stating, “This development is key if we’re going to deal with the challenges of our growing city and wider region in future years. With Edinburgh’s population expected to increase by over 60,000 in the next 20 years, investment in the tram and wider public transport is more important than ever.”

As Edinburgh Trams navigates these financial challenges, the focus remains on enhancing service and expanding infrastructure, aiming to position the tram system as a vital component of the city’s transport network.