Birmingham-based transport group National Express (NEX) is to mount a vigorous campaign to attract customers as it revealed high petrol prices were persuading more people to leave their vehicles at home and use the bus or train instead.
Free tickets and an awareness campaign – Dump the Pump – are being used to entice potential passengers although, as petrol costs escalate, public transport is becoming more attractive anyway.
A survey carried out for the firm by YouGov showed that almost two thirds of car drivers were turning to public transport as a cheaper alternative for getting to work.
National Express chief executive Richard Bowker said he was pleased that more people were using the group’s services but he added that the company wanted more of their custom.
“We have been encouraged by the number of passengers using our services but we want to get more to do the same,” he said. “It represents a modal shift in the business but in order to attract customers we have to ensure our product offering is good and that we continue to invest in new buses and trains.”
The comments came as the firm posted a 14 per cent rise in underlying pre-tax profits to £90 million for the first half of 2008 and said full-year results would be in line with market hopes.
Oil prices have reached almost 150 US dollars a barrel so far this year but the company’s fuel costs are fully hedged for 2008, and 56 per cent hedged for next year.
Its train business operates three franchises - c2c, East Anglia and the recently-won East Coast Main Line. Operating profits jumped 38 per cent to £39.6 million over the period, on like-for-like revenues up nine per cent.
“Continued revenue growth is expected to be driven in part by the attractiveness of rail over car for long distance journeys and the rising cost of fuel,” said the firm in its interim statement.
Mr Bowker said the integration of the business combined with its relocation to Birmingham had now been completed, the move delivering £11 million of cost savings.
“The ability to market the company as a single brand is proving very effective and will enable us to focus on our total offering,” he said.
The chief executive said he was also encouraged by the developments taking place within the city, especially the £9 million redevelopment of Digbeth Coach Station.
“It is a fantastic scheme, being built by a local developer – Ashfords – and when complete it will be a fitting gateway to the city,” he said.
The firm’s bus business has continued to develop. The first partnership routes in the West Midlands have increased passenger numbers by 12 per year-on-year and it said that links with Centro had led to a review of routes in Dudley which had led to an improved service.
“This exercise has proved very successful and we may look to do the same in other areas,” said Mr Bowker.
The company said it had also done well in its overseas markets in Spain and the United States, especially in the latter where it had secured contracts worth $15 million.
In Spain - where the firm is the country’s largest private coach and bus operator - the company benefited from the stronger euro and organic growth.
Shares were down 2.5p at 977p.