Arriva reports rail revival

Dec 17 2009 By nebusiness

THE operator of the CrossCountry rail franchise today said there had been a "substantial improvement" in passenger revenues in recent weeks.

In a trading update, Arriva reported a 2.1% rise in CrossCountry revenues for the year to date, accelerating to a gain of 6.1% over the past 13 weeks.

Despite the upturn Arriva said the improvement was still insufficient to compensate for declining franchise support payments.

The company warned at the start of this year that it needed passenger revenue growth of around 10% a year to maintain 2008 profits. Revenue support measures from the Department for Transport do not kick in until 2011.

The CrossCountry franchise, which Arriva secured in 2007, covers 1,400 miles and calls at more than 100 stations between Aberdeen and Penzance, Bournemouth and Manchester and Cardiff and Stansted in Essex.

Across the business, which operates in 12 European countries, Arriva said it continued to trade in line with expectations, helped by ongoing cost reductions as it offsets recessionary pressure and a £60 million fuel cost rise.

The company said: ``Whilst the economic environment remains challenging there is evidence of recovery in passenger revenue growth in our UK trains division."

At Arriva Trains Wales, passenger revenues growth was 7%, compared with the 6.7% improvement reported in October.

Revenues in the UK bus division increased by 4.4% in the 11 months to November 30, compared with 4.9% in the nine months to September. The company said it had cut mileage on regional routes in a bid to reduce its cost base.