FirstGroup reports north-south divide in growth rates

FirstGroup said its bus operations in the north faced particularly challenging trading conditions

FirstGroup's bus operations in Scotland and the North of England are seeing lower growth rates than the south, the transport group said.

In an stock market statement, the operator said there was evidence of a widening north-south divide.

FirstGroup said like-for-like UK passenger revenue increased by 1.8% in the third quarter of 2011.

But it added the "weak economic environment" continued to present challenging trading conditions.

The Aberdeen-based firm said this was particularly the case in the north of the country, where a significant portion of its urban operations were concentrated.

It added: "As a result we are achieving lower growth rates in these areas as we see a widening north-south divide.

"Our priority remains to maintain our strong cost discipline and focus while equipping our networks, as appropriate, for future growth."

In November, FirstGroup asked the Office of Fair Trading for permission to cut back on bus routes linking Glasgow city centre with some destinations to the east.

FirstGroup requested removal of a service to Carmyle and reduction of an East Kilbride service at Castlemilk.

It also asked to cut the frequency of evening services to Airdrie and a route to Easterhouse.

FirstGroup applied to vary its undertakings in part because of an "appreciable fall" in passenger demand and significant increases in operating costs.