Stagecoach gives profit warning after Paris attacks curb city breaks

Visitors are staying away from big cities in the wake of the Paris terrorist attacks, Stagecoach has said.

The profit warning from one of the UK’s biggest transport operators, sent shares down 14% to 306.6p.

Stagecoach, which operates bus services between Paris and London and other European cities, said that since mid-November it had seen a reduction in revenues on parts of its rail and inter-city coach operations in the UK and Continental Europe. However, the company said it expects traffic to recover.

“We believe that revenue has been adversely affected by the terrorist attacks in Paris discouraging people from travelling to major cities,” the transport group, which also runs the UK’s main train services between London and Scotland, said.

Stagecoach did not give any detail about where passenger numbers had fallen most, although it is understood there were swathes of empty train and coach seats to Paris immediately after the attacks in November which killed 130 people.

A spokesman for the group said that passengers’ propensity to travel by coach on services between Paris, Brussels and London had all been hit but that traveller numbers had already rebounded, although not yet to the levels seen before the Paris attacks.

There has also been reduced demand for weekend travel into central London on South West Trains.

The group had enjoyed a strong year up to this point with reported revenues for the six months to the end of October up 27.5% to £1.97 billion. Pre-tax profits jumped by 11.8% to £121.5 million.

But the company has also seen softer-than-anticipated revenue from a number of its British bus operations, arising from reduced Government spending on public transport, which contributed to its decision to guide expectations downwards.

Only its North American business saw a reduction in revenue, as the fall in oil prices has caused people to return to private cars, leading to lower demand for Stagecoach’s megabus.com services.

In UK rail it recorded revenue growth of 63% after Virgin Trains took over the London to Edinburgh East Coast mainline services.

Stagecoach has plans to run “significant” additional services on the route from 2019 but is objecting to proposals by other operators to run new services under the “open-access” formula.