Go-Ahead, Britain^s busiest train operator, said that profits on its London to Midlands franchise had been hit by recent labour disputes.
The company was hurt by unofficial industrial action in September when drivers failed to turn up to work following the end of an agreement that gave them double pay on Sundays.
Keith Ludeman, chief executive, said on Thursday that management changes relating to the dispute would ^largely offset the underlying profitability of this franchise for the current financial year^.
The owner of the London Midland, Southern and Southeastern franchises, which carry about 900,000 passengers a day, said further job cuts and changes to working practices would be needed to keep costs down.
The company is heavily exposed to the London commuter market and has seen rising unemployment hit passenger numbers over the past six months. Mr Ludeman predicted that the economic climate would remain ^tough^.
Meanwhile, the uncertain state of the rail market was highlighted in a trading statement by Arriva, which said that consistent growth had resumed at its CrossCountry franchise, which runs between Aberdeen in Scotland and Penzance in south-west England.
Passenger revenue growth slowed to 1.3 per cent in the 42 weeks to October 24 but rose by 3.8 per cent in the past six weeks. Growth was even higher at its Arriva Trains Wales franchise at 6.7 per cent.
Douglas McNeill, analyst at Astaire Securities, described the Arriva figures as a ^ray of light^ for the industry. ^Like its close cousin the employment market, the rail industry is emitting mixed signals at present,^ he said. ^The question for both is whether demand will turn up as soon as GDP does, or only much later.^
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