National Express profits up 8%

National Express served notice yesterday that it would not give in to striking train drivers who are threatening to cause havoc on services in Scotland.

The train drivers' union Aslef has scheduled 11 one-day stoppages on the ScotRail network, including one timed to coincide with the European Champions League final in Glasgow, in pursuit of a 22 per cent pay claim.

But Phil White, the chief executive of National Express, made it clear that the company would not surrender to the union's demands, describing them as "outrageous and incomprehensible".

He was speaking as National Express announced an 8 per cent increase in pre-tax profits to £129m for last year on turnover up 25 per cent to £2.5bn.

Mr White said that National Express had the full support of the Government, the Scottish Executive and the Strategic Rail Authority for its hardline stance in the pay dispute. The wage claim would increase the basic pay of a ScotRail driver from £23,000 to £28,000. National Express has offered 3 per cent, plus a further increase linked to productivity.

Ministers fear that if ScotRail gives way, then the settlement will set a benchmark for other train operating companies, putting renewed strain on their finances and increasing the pressure for higher subsidies.

Aslef has already staged a number of 24-hour stoppages, which are costing £250,000 a day, and if the series of rolling strikes goes ahead then it will cost National Express a further £2.75m.

The group is also grappling with major problems in its Australian train and tram operations in Melbourne where fare-dodging is now running at 30-40 per cent, costing the company A$30m (£11m) in lost revenues. National Express is now seeking to renegotiate its subsidy payments from the Victorian government to put the business back on a secure footing.

Mr White said National Express had £100m-£150m to spend on acquisitions. It is keen to expand its 5 per cent share of the UK bus market.