National Express benefits from rising fuel costs

CONCERNS over spiralling fuel costs has helped grow National Express (NE) passenger numbers for both its train, bus and coach services.

The travel company said that it anticipated continuing interest in its services as the high price of fuel encouraged a switch from car to public transport.

It maintains that it can recover its own additional fuel costs through a combination of “innovative pricing mechanisms” and improved operating efficiency, adding that fuel only represents 5% of revenue in trains, 14% in coach and 10% in buses.

NE has good reasons for its bullish confidence. In a trading update for the half year ending June 30 announced today the group revealed that trading is in line with expectations with significant year-on-year earnings growth expected for the half and full year.

Its train business has seen a 9% growth in passenger revenue with the newly launched National Express East Coast service experiencing 11% growth.

Other regional services have also seen an increase in passenger revenues, although dot2dot – NE’s new airport transfer service – hasn’t performed as strongly as anticipated.

The company said that its overseas operations in Spain and North America also continue to perform well.

“The group has made a good start to 2008,” it said.

The upbeat announcement comes days after National Express announced the appointment of Jez Maiden, currently chief financial officer of Hull-based Northern Foods, would be joining them as group finance director later this year.

National Express will announced its interim results on July 31.