Go Ahead sees benefit as fuel prices force cars off road.
PUBLIC transport giant Go-Ahead is reaping the rewards of high fuel prices, which are pushing people out of their cars and on to its buses and trains.
The Newcastle group said that bus passenger numbers rose by 7.2% and by 5.8% on its Southern, Southeastern and London Midland rail franchises.
The figure, for the period from January 2 to May 4, will now lift Go-Ahead to better than expected full-year operating profits, it said.
Chief executive Keith Ludeman said: "Once again, we have seen a strong performance across our businesses. The continued growth in bus passenger numbers demonstrates that the public are increasingly leaving their cars at home. "The public is struggling with the current high levels of fuel pricing and many are now choosing the better value alternative of the bus."
Go-Ahead itself, which employs 22,000 people and runs 3,800 buses around the UK plus a yellow school bus joint venture in the US, uses around 115 million litres of fuel each year. It 'hedges' its fuel purchases and has secured its supplies at 41p a litre up to the end of its next financial year.
Overall bus revenues jumped by 9.8% in the quarter or 8.3% after acquisitions, and the rail franchises also showed strong revenue growth.
Revenues on the Southern franchise jumped by 11.6%, by 7.5% on Southeastern and by 11.2% on London Midland.
But Mr Ludeman warned: "While there is much to be positive about in the trading update, we continue to remain cautious about the medium-term prospects for the wider economy." Go-Ahead's bus services are strong in London, where bus passenger numbers are on an upward trajector y. John Austin, a public transport consultant from Austin Analytics, said: "Go-Ahead is a pretty canny operator, focused highly on urban bus services where there hasn't been cuts to local authority funding.
"There is some local authority support but they have a very strong commercial business in urban and semi-urban areas.
"In urban areas, and also where there are strong parking controls and high prices, the whole combination of fuel, parking and congestion make car driving in some cities quite a hassle."
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|Publication:||The Journal (Newcastle, England)|
|Date:||May 6, 2011|
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