Great Western Coffee Shop

American Tim O^Toole could suffer an early blow to his popularity as new boss of Aberdeen transport giant FirstGroup this week when he is expected to confirm that some rail fares may rise by more than 10% in the New Year.

The admission is likely to accompany a trading bulletin from the ScotRail, First Great Western and First Capital Connect owner on Tuesday and is due just 24 hours after the former London Underground boss succeeds Moir Lockhead on November 1.

The inflation-busting rise in fares is a result of new flexibility announced by the Government which is allowing all the rail companies to charge up to 6% above last year^s 4.8% inflation rate on some popular routes as long as average rises are kept to a maximum of 5.8%.

FirstGroup could move to deflect some of the criticism by pegging rises to around 1% on some routes and will point to cheaper fares available through early bookings over the internet.

^It is not in our interest to drive passengers away from the railways,^ a spokesman commented.

^It is not in our interest to drive passengers away from the railways,^ a spokesman commented.

FirstGroup will stay in Aberdeen, vows new boss

The new boss of FirstGroup has vowed to keep the multi-national transport company's headquarters in Aberdeen.

Tim O'Toole, who has taken over as chief executive from veteran boss Sir Moir Lockhead, said the city was the "soul" of the firm.

FirstGroup, which started as Grampian Regional Transport in 1989, now has a ^6bn turnover and 130,000 employees.

Mr O'Toole said although it was now a global company, FirstGroup was "all about local delivery". He told BBC Scotland: "We have this brand new glorious, although modest, HQ opened in Aberdeen and I am certainly going to keep it here. It is where the company started, it is where the soul of the company is and, so long as we are welcome, this is where we will be."

Mr O'Toole also paid tribute to his predecessor Sir Moir Lockhead, who has handed over his executive responsibilities after 21 years and will officially retire on 31 March next year.

"The man is a colossus in the industry and I think it is not about my stepping into his shoes," he said. "It is really about me and all my colleagues here at FirstGroup stepping in together. We are kind of moving into another era. "

FirstGroup's portfolio includes the Scottish rail franchise, city buses and school buses across the USA.