FirstGroup’s bus operation on the mend

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FIRSTGROUP said it was seeing green shoots of recovery in its embattled bus business despite reporting a 33 per cent plunge in half-year earnings at the division.

The UK’s biggest bus operator posted operating profits of £39.6m for its bus arm, down from £59.4m a year earlier as higher fuel costs, lower demand and reduced subsidies took their toll.

The plunge contributed to a 42 per cent fall in group wide underlying pre-tax profits to £48.7m in the six months to September 30.

But FirstGroup said there were encouraging signs that a “clear and detailed plan” to fix the bus operation was beginning to work in some of its markets.

Aberdeen-based FirstGroup has been introducing local fare promotions, which it said had boosted passenger numbers by 17 per cent in Sheffield and by 25 per cent across certain routes in the Manchester area.

It is also revamping its bus depots and vehicle repair operations, while spending £160m on 1,000 new buses and revamping a further 750 as part of a £4m modernisation programme. The group is investing another £27m in new ticketing technology, including a ‘touch-in, touch out’ contactless payment system using bank cards.

Bus passenger revenues rose by 2.6 per cent on a like-for-like basis in the first half.

The transport group runs bus services in York, Leeds, Bradford, Halifax, Sheffield, Rotherham and Doncaster.