Transport group Stagecoach said environmental fears and higher fuel costs were sparking a "fundamental shift" towards public transport as it unveiled big revenue rises for bus and train operations.
The Perth in Scotland-based firm said like-for-like revenues rose 13.6% at its train arm - which includes South West Trains and East Midland Trains - and 7.5% at its UK bus division.
They helped the group post underlying pre-tax profits of £174.4 million for the year to April 30, marginally ahead of market expectations.
Chief executive Brian Souter said: "We believe 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."
He said the current financial year had started well, and was encouraged by the "significant potential for further modal shift from the car to bus and train travel".
Stagecoach's total revenues from continuing business were up 17.2% at £1.76 billion.
Revenues at its trains division, which contributes around 45% of group turnover, rose 36.1% to £777.8 million.
The company said it was down to "strong" organic growth - passenger volumes at South West Trains franchise were up 5.7% in the year - and first contributions from East Midlands Trains taken last year.
Revenues for the new network between November 11 last year and April 30 were up 9.5% on a comparable basis, Stagecoach said.
UK trains' operating margin fell during the year to 7.6% from 10.3%. This was blamed on the new terms of the South Western franchise, which replaced the old South West Trains deal in February 2007.
Overall like-for-like passenger volumes at the UK bus arm, which contributes just over 40% of group revenue, were up around 3.6%.
The division saw operating margin rise to 14.8% from 12.2% in 2007, representing revenue growth, relatively stable year-on-year fuel costs and a continued focus on cost control.
Around two million UK passengers travel on Stagecoach buses every day in around 100 towns and cities in the UK. The firm has a fleet of around 7,000 buses.
Stagecoach said it was "mindful" of the cost impact of rising fuel costs. The group gets through 328 million litres of diesel per year.
Shares were down nearly 5% today.
Stagecoach's 49% shareholding in Virgin Trains, which operates on the West Coast Main Line, delivered £32.2 million in pre-tax profits for the year, up from £18.9 million. The franchise posted like-for-like revenue growth of 11.2%.
Stagecoach said a planned upgrade for the line should deliver a 30% rise in capacity from this December.
But it warned there was "significant risk" that track maintainer Network Rail may not deliver an upgraded railway that is "acceptable to Virgin Rail and its passengers".
"We continue to monitor developments carefully," Stagecoach said.
Broker Investec said although the outlook for the company remained robust it had not been persuaded to upgrade its estimates.
Analyst Joe Thomas said: "While we recognise that it is one of the best managed businesses in the sector....we remain concerned over the prospects for South West Trains in the event of a consumer slowdown."
But Bob Crow, general secretary of the Rail Maritime and Transport union, accused Stagecoach of putting profits ahead of service and safety.
He said: "Passenger numbers on South West Trains are up by nearly 6% but they want to slash ticket-office opening times on well over 100 stations.
"That puts up to 140 jobs under threat and undermines service and safety for staff and passengers alike and it is unacceptable.
"People want to see more staff on stations, not fewer, and it is time for the government to stop rail privateers milking ever-bigger profits out of what should be a public service and not a cash cow."