Rail arm hit but Stagecoach’s Megabus a winner

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TRANSPORT group Stagecoach reported a slide in half-year profits as its UK rail business swung to a loss for the first time in 10 years.

There was better news at the company’s bus division, which runs major bus operations in cities such as Sheffield and Hull as well as the Sheffield Supertram.

The regional bus division reported a nine per cent increase in operating profits to £80m thanks to an increase in passenger numbers.

Stagecoach’s Megabus service, which offers fares from £1, is to ramp up its expansion by spending £44m on more than 100 new buses.

Megabus’s budget formula has proved a hit with travellers since its launch in 2003.

The UK service carries around three million passengers a year, which Stagecoach hopes to improve on with the addition of 11 double-decker buses to replace single-deck versions currently operating on routes between London and Leeds, Sheffield, Bristol, Cardiff and Newcastle.

There will be 87 buses in the UK fleet.

With greener engines and the convenience of toilets, wi-fi and power sockets, Stagecoach chief executive Sir Brian Souter said the service is attracting a customer who would have not used public transport in the past.

“Many of the people we are attracting used to travel by car, so the switch to greener coach travel is better for the planet,” he said.

Research by Stagecoach suggests 50 per cent of passengers would have taken the car and 20 per cent would have taken a flight, pointing to a new breed of customer – middle class and professional but thrifty at the same time.

Deliveries of the new buses in the UK are due to begin next month.

Stagecoach said its East Midlands Trains franchise was behind a £6.9m operating loss at the rail division as it failed to deliver revenues forecast in 2007 when the contract was awarded.

But Stagecoach said the rail arm would return to profit by the end of the year as East Midlands Trains is due to receive revenue support payments from the Government.