Low fares hold back profit recovery at National Express

National Express has said that efforts to keep its fares affordable for customers in the UK will slow the pace of its margin recovery.

It comes as consumers face the biggest squeeze in household incomes in nearly 50 years.

In a trading update, the coach operator reported that its revenue “continues to track close to 2019 (pre-pandemic) levels” and full-year revenue in 2022 is anticipated to be around £2.7bn.

It expects to record at least £1bn of revenue growth from 2022 to 2027.

However, in the short term a recovery in profit will lag behind the revenue recovery due to the cost-of-living crisis as well as “unprecedented” levels of wage inflation among school bus drivers in the US.

The company anticipates a profit margin of around 7% in 2022, with a gradual rise to pre-pandemic margin levels of around 10% within five years.

Earlier this year National Express lost out to German asset manager DWS Infrastructure in its bid for rival bus and coach firm Stagecoach.