Stagecoach plans rail savings

Date: 9/12/2009

Transport provider Stagecoach has revealed plans to reduce costs by £20 million at its rail operations after the division posted a significant fall in profits during the second half of 2009.

The company, which operates South West Trains and East Midlands Trains, is seeking to make the savings in order to offset lower revenue growth and higher franchise payments to the government over the course of the year.

However, the firm said there would be no further job losses at the company, which has already shed 400 jobs in order to make substantial savings as the recession hits.

Despite profits falling by nearly a half to £14.9 million during the six months to the end of October, the rail operator said revenues from the UK rail business rose by 1.9 per cent during the same period, suggesting passenger numbers have not been substantially affected by the recession.

Budget tickets over the summer proved a popular way to encourage more passengers onto the company's rail operations, as the number of Britons choosing to holiday in the UK increased this year.

Many people were tempted to remain in Britain for their summer holiday because of the weak pound and forecasts of good weather.