National Express aims to profit from cheaper travel

The group, which serves most towns and cities in Yorkshire, said it planned to add 120 new buses to its West Midlands fleet this year and draw in more customers with a new marketing campaign, as there was evidence the UK recession had encouraged passengers to seek “more cost effective” modes of transport.

Elsewhere, the company said it would add routes to its coach businesses and draw in customers with new special-offer fares – in line with its successful £9 go anywhere deal which expires today – and that there were future franchise opportunities approaching for its rail arm.

The positive outlook came as the group posted a 26 per cent rise in pre-tax profits to £95.5m in the six months to June 30 after a six per cent increase in revenues to £1.bn.

National Express said the bus marketing campaign would highlight the costs of running a car versus the cost of bus travel.

The company claims that on some major routes leaving a car at home and taking the bus could save a customer £2,500 a year. The campaign comes at a time when consumer spending power is being squeezed by high inflation.

The company has been rolling out a margin-improvement programme at its bus division, including an overhaul of ticket prices.

Cash single fares remained unchanged, but the pricing of travelcards – accounting for 50 per cent of the division’s revenues – increased in order to better match journey demand with supply.

Meanwhile, the company laid on more routes in busier, usually urban areas, and reduced them in less popular, often rural neighbourhoods.

John Lawson, an analyst at Investec Securities, said all divisions had performed well in the consensus-beating results. He said: “A good performance overall although we temper our underlying view with the knowledge that National Express is recovering from a low base and the economic backdrop remains tough.”

National Express operates more than 1,600 buses, while its coach operation serves more than 1,000 destinations and employs 1,600 people.

Earlier this year, the firm’s biggest shareholder, Elliott Advisors, was prevented, for at least 12 months, from forcing National Express to adopt a more aggressive tack, including expansion in the United States.