Cheaper, faster journeys to lure people from cars

Jun 28 2008 by Andrew Hebden, The Journal

EAST Coast Main Line operator National Express said it was confident of combating rocketing fuel bills with pricing promotions and cost savings as it hailed growing revenues and improved punctuality on the route.

The rail, bus and coach operator, which runs services from the North East to Scotland and London, said it was planning to use "innovative pricing mechanisms" to help offset soaring oil prices, which this week broke through the $140 a barrel mark.

National Express yesterday said it was expecting significant year-on-year earnings growth for the half-year and full year and hoped to benefit from the switch to public transport amid sky-high petrol prices.

The statement echoed the sentiments of Sunderland public transport group Arriva, which delivered an upbeat trading statement on Thursday predicting a 50% surge in turnover in its half-year results.

National Express, which took over the East Coast franchise from former operator GNER last December, gave assurances that fuel costs, which have weighed heavily on stock market-listed transport firms, represent a fraction of total revenue, at 5% for its trains business, 14% for coaches and 10% for buses.

National Express has also "hedged" itself against rising oil prices for 100% of its fuel needs this year and 47% for 2009. National Express said passenger revenues at its trains arm had risen 9% like-for-like in the five months to May 31 and the East Coast line was among the top performers, with revenues up 11%.

Punctuality on the flagship route has also improved, and "daily performance is now regularly above 90%", the company said.

"Our focus on first-rate customer service, a key tool in attracting more people back to rail, is seeing positive results. The franchise plan for the first year is on track," it added.

Earlier this week, the firm said it hoped to reduce travel time to London from the North East through a timetable shake-up.

Under its proposals for the East Coast line – which are subject to regulatory approval – services from London King’s Cross to Newcastle Central would be cut from three hours 10 minutes to two hours 50 minutes.

The plans would be the biggest improvement to the route since it was electrified in 1991.

Shares in the business closed the day up 24.5p at 941.5p.