Play fair over rail fares
RAIL operator National Express said its East Coast mainline service was under financial pressure following the Government’s decision yesterday that fares should fall in line with inflation.
Despite increased full-year profits announced today, the company which took on the East Coast franchise a year ago from GNER warned that its rail business faced “challenging conditions”.
Chief executive Richard Bowker said “constructive discussions” were taking place with the Government on the outlook for UK rail.
“Notwithstanding this, we have plans in place to reduce costs in order to deliver a profitable rail business.”
For the year 2008, National Express Group made a pre-tax profit of £194.1m - up 9.7% on 2007. It shaved the full year dividend to 22.72p per share, recommending a final dividend of 10p per share, which is expected to save more than £30m.
Along with other train companies, National Express can expect to receive much less from fares next year.
The company said today: “The East Coast rail franchise is undoubtedly exposed to recessionary impact, with a high fixed cost base and no revenue underpin until 2011.”
