FirstGroup, headed by chief executive Sir Moir Lockhead, told analysts that bus passenger numbers are down as much as 1.5% on last year.
The rail industry has been suffering from lacklustre demand for months, prompting National Express to hand back its East Coast Main Line franchise later this year.
A combination of price increases and slimmed-down timetables has helped keep revenues flowing in FirstGroup’s bus business.
Like-for-like passenger revenue from the bus operation, which operates across Aberdeen and Glasgow as well as various English cities, is expected to have increased 2.3% over the first six months of its financial year to September 30, the company unveiled in a trading statement yesterday.
Analyst Douglas McNeill, of Astaire Securities, blamed rising unemployment and people taking fewer shopping trips for the passenger slump.
But he went on: “Costs are a bit more flexible on bus than on rail. FirstGroup have protected themselves pretty well by running fewer buses and so on. The result in bottom-line terms is unchanged.”
FirstGroup said profitability in the division “remained on course”.
The position is worse at FirstGroup’s US coach business Greyhound, where revenues are expected to be 20.3% down.
It accounts for 10% of group earnings.
FirstGroup said its rail division, including ScotRail, is expected to post 1.7% revenue growth for the period, ahead of some expectations.
Lockhead, who has axed 4,000 positions at the company this year, said: “We have demonstrated our ability to respond swiftly to changing patterns of passenger demand.”
He said FirstGroup is “on course” to meet earnings, targets despite a “challenging year ahead”.
Its shares closed down 11p or 2.6% at 413.7p.
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