The operator of numerous bus and train services across Sussex has blamed higher fuel bills for a 13 per cent drop in profits in the second half of 2005.

Go-Ahead, which owns Brighton and Hove Bus and Coach Company, said fuel costs in its bus division were £4.7 million higher than in the previous six months.

Meanwhile passenger numbers fell on its Southern and Thameslink train franchises in the weeks after the July terrorist attacks in London.

Interim pre-tax profits were £43.6 million for the half year, down 12.6 per cent on turnover which rose 6.5 per cent to £675.9 million.

Despite the decline, Go-Ahead expected an improved performance in the second half of the financial year.

Passenger growth on its rail services had picked up since the bombings, the company said, with Thameslink - which suffered most - recovering its position by the end of December.

While Go-Ahead has lost the Thameslink franchise to First Group, it is set to run the South Eastern Trains network, combined with theSouthern service it already operates.

Go-Ahead said its aviation division, which runs ground services and car parking at airports including Gatwick, was seeing a profit recovery after a restructuring and cost reduction programme.

It said it was reducing its dependence on charter airlines for more work with scheduled airlines.

Chief executive Chris Moyes said every 1p on a litre of diesel increased its fuel bill by around £1 million a year: "High fuel prices are not a blip, they're a long term problem," he said.

Mr Moyes said fares prices could increase by around six per cent - and that services would be reduced in some areas.

County Durham, where the firm had around a 35 per cent market share, was one region where the number of buses operating was likely to be cut.

However Mr Moyes said there would be no wholesale withdrawal from markets, with the changes more likely to mean fewer services, especially at less busy times of day.

He added that Southern Trains had lessened the impact of the London bombings on business by promoting alternative trips for families to the south coast as an alternative to going into the capital.

Commuters using Thameslink had soon resumed using the service though it took time for leisure passengers to start travelling in numbers.

Go-Ahead employs more than 20,000 people across the UK and services around 700 million passenger journeys each year.

The company takes over the South Eastern rail franchise from April 1.

Tuesday, February 21, 2006