Transport group Arriva today said additional services and greater passenger use had shielded its bus operation from rising fuel costs.

Sunderland-based Arriva, which runs 6,500 buses in cities including Liverpool and Leeds, said its overall group performance remained on track to meet City forecasts, with 2008 also expected to deliver profitable growth.

The company added that its UK train division achieved a 'smooth start' to the running of its nine-year CrossCountry inter-city franchise, which commenced on 11 November. It also runs the Arriva Trains Wales franchise.

Rival firms Stagecoach and FirstGroup have also announced positive trading updates in recent days, as passenger usage is driven higher by factors such as car congestion and inward migration.

With measures in place to limit the potential impact of fuel price increases in 2008, Arriva said it was well placed for 'another year of profitable growth and strategic opportunity.'

Shares were down with the rest of the market, off 16p or 2.1%, at 745 pence.