Edinburgh Trams make £9 million loss despite record revenue and passenger numbers
‘The annual charge the council levies on the tram company to pay down the debt makes up the lion's share of the operating loss’ - Cllr Stephen Jenkinson
Edinburgh Trams made a loss of £9.3 million last year despite achieving record passenger numbers.
Almost 12.5 million journeys were made on the Capital's trams in 2025, a 3.3 per cent increase on the previous year. The figure compares with the 5 million passengers carried in 2015, the first full year of the trams' operation and a pre-Covid high of 7.4 million, both before the opening of the extension from the city centre to Newhaven in June 2023.
Edinburgh Trams' accounts, published on the Companies House website at the weekend, also show record revenue of £33.1m, up from £28.9m in 2024 and £3.1m ahead of its 2025 target. Revenue has doubled since 2019, which the company described as "a remarkable rise over a period of six years".
But the overall loss of £9.3 million makes 2025 the eighth year running that the trams have recorded a loss. They have only made a profit twice - £250,000 in 2016 and £1.6m in 2017. Losses were £7.62m in 2018, £9m in 2019, £8.8m in 2020, £8.7m in 2021, £10.9m in 2022, £10.3m in 2023 and £9.6m in 2024.
But a big part of the shortfall is explained by the £8.5 million annual fee charged by the council since 2018 to "reflect the additional borrowing costs associated with the cost overrun on the original line".
Edinburgh Tory group leader Iain Whyte said on the current basis, unless passenger numbers increased massively it was likely the tram would continue to lose money "for a very considerable number of years".
And he argued the losses would have to be taken into consideration when looking at the proposed new North-South tramline between Granton and the Royal Infirmary.
He said: "Passenger numbers are very good - but just not enough. It calls into question the plans to spend vast sums of money to expand the tram network if we cannot run it in at least a cost neutral way."
And he voiced fears that the profitable Lothian Buses could be expected to cross-subsidise the loss-making Edinburgh Trams since they had been brought together under one chief executive. He said: "I dread to think we could lose some of the best bus services just to make the trams pay a bit better."
But city transport convener Stephen Jenkinson rejected Cllr Whyte's claims
He said: “The headlines figures in the accounts show a business that continues to to attract record passenger numbers and generate growing revenue which is a positive reflection of the confidence people have in Edinburgh Trams.
“While the reported operating loss will understandably attract attention it is important to look beyond a single headline figure as there are a number of factors that influence annual accounts, including the annual charge the council levies on the tram company to pay down the debt, which makes up the lion's share of this year's operating loss.”
He said there was no risk of bus profits being used to balance tram losses. “Edinburgh Transport and Lothian Buses are both part of the same family but they are separately managed businesses with their own financial responsibilities. The integrated public transport model in Edinburgh is one of the city's strengths, with buses and trams complementing each other rather than competing with one another. There is no question of cross-subsidy because of the way the separate companies are constructed.”
And Cllr Jenkinson dismissed the claim that the losses called into question the North-South tram line. He said: “If anything it reinforces why we need to take a long-term view. Major transport infrastructure should never be judged on a single year's accounts. The tram network is generating millions of passenger journeys every year, supporting economic growth, reducing congestion and helping the city meet its climate ambitions.
“The case for future expansion will continue to be assessed through robust business cases and careful financial appraisals and any decision on extending the network will be based on long-term benefits, affordability and value for money, not one one year's financial performance.”