Stagecoach speeds ahead as commuters ditch their cars

Rail and bus operator Stagecoach today posted a 7.6% jump in profits and said soaring fuel prices and concern about the environment were persuading commuters to abandon their cars in favour of public transport.

Chief executive Brian Souter said: "There are growing signs of a fundamental positive shift in customer attitudes towards public transport, driven by increasing road congestion, rising fuel costs and concern about climate change."

Its South West Trains franchise performed particularly well last year, with the number of passengers rising by 5.7% as commuters in and around London left their cars at home. Total Stagecoach revenues were up 17.2% to £1.76 billion in the year to the end of April - sending profits up from £162 million to £174.4 million. It today proposed a 31.7% rise in the dividend to 5.4p.

Unions have reacted with anger to plans by Stagecoach to cut opening hours at rail ticket offices on the SWT network across the South-East.

The Rail Maritime and Transport union insists the increasing number of passengers using SWT means there should be an increase in station staff, not a decrease. Stagecoach finance director Martin Griffiths today said: "I suspect we will never agree. We are making significant investment in automating ticketing machines, driving down queues and making the customer experience better."

He warned that the Stagecoach fuel bill will rise by £27 million this year to £139 million as a result of soaring oil prices. But he said it was an opportunity for the firm to attract new customers put off driving by rising petrol prices.

Stagecoach also owns a 49% stake in West Coast Trains operator Virgin Rail but today warned there was "a significant risk" Network Rail will not deliver necessary upgrades to the track on time - causing more misery for passengers.