Price rises fail to deter Go-Ahead's passengers

Transport group Go-Ahead said it was on track for better-than-expected results as rail passenger levels grew in the face of fare increases in January.

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Transport group Go-Ahead said it was on track for better-than-expected results as rail passenger levels grew in the face of fare increases in January.

The company hailed the "particularly strong" performance from its Southeastern and Southern rail franchises, even after commuters were hit with 6.3% fare increases on Southeastern trains and 4.3% on Southern journeys.

The Newcastle-based firm said passenger numbers had grown by 9.6% on Southern trains and 6.4% on Southeastern services in the first three months of 2007.

Go-Ahead said results for the full year would be "ahead of management's previous expectations" despite cost pressures including an extra £3.5m in electricity charges to operator Network Rail.

Go-Ahead operates the Southern and Southeastern franchises with French firm Keolis through the Govia joint venture.

It said that Southeastern's performance was "significantly ahead of plan" as increased revenues exceeded the company's operating costs for the franchise.

The company, which runs the franchises under a profit and loss sharing arrangement with the Department for Transport, added that it was now gaining profit share payments from the Southern franchise at a rate of 80%. Go-Ahead is also hoping to win more rail deals with a decision due in May on the North London franchise. A decision on the West Midlands franchise on which the firm is also bidding, will come in July.

Go-Ahead's bus operation, which runs services in Oxford, Wiltshire, Southampton, London and the Isle of Wight, saw "robust" trading despite recent hikes in fuel prices.

The company reported continued passenger growth, albeit at lower levels than in the previous quarter, as the firm looked for cost efficiencies in the division.

But its aviation services business has suffered after its talks with Air Canada over providing ground handling services at Heathrow airport ended.

The potential deal was worth up to £11m a year to Go-Ahead over the next seven years.

Profits in the business have already been hit by last year's terrorist scare at UK airports, as stricter hand luggage rules increased turnaround time for aircraft.

The company said expectations for the division had been cut for the full year although Go-Ahead is in talks with British Airways over taking on its ground handling services at Aberdeen, Edinburgh, Glasgow and Manchester airports.

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