FirstGroup "remain committed to Scots bus market" FIRSTGROUP boss Tim O'Toole has said the transport giant remained committed to the Scottish bus market after unveiling a slump in passenger numbers. Speaking after the Aberdeen-based group unveiled narrower losses for the first half of the year, First's chief executive admitted that Glasgow in particular was suffering from "the broader phenomenon" of high numbers of economically inactive households. But he vowed that FirstGroup would continue "to show good faith," stressing "we remain committed to the market." "We have to be an important part of the community, because transport is an enabler," added O'Toole. Scottish bus volumes outside the group's home city were down by an average of 3 to 4 per cent during the six months to the end of September. This was in contrast to the division's UK-wide performance, with 0.7 per cent growth in passenger numbers marking the first rise in volumes in five years. First - which was forced into a deeply-discounted £615 million rights issue in May - is attempting to revive its struggling UK bus business by tailoring fares and networks to local market conditions. O'Toole said there were early signs of progress, but added that "we know we have a lot of work left to do." The group as a whole - with operations spanning UK bus and rail franchises, plus school bus and long-distance coach services in the US - posted a pre-tax loss of £8m for the first half, down from £20.6m during the same period a year earlier. Continuing problems at its UK bus arm and Greyhound, the company's North American coach business, were partially offset by higher profits from the UK rail division and First Student yellow school buses. Group revenues were 1.6 per cent higher at £3.3 billion. Analysts said the results were in line with expectations, but added that the turn-around strategy was in its early stages. Martin Brown of Shore Capital said this was particularly evident in the UK bus business, despite the improvement in "lost mileage" due to break-downs and service delays. "It is clearly too early to judge the progress being made through the transformation programme," Brown said. "However, we would draw investors" attention to the fact that lost mileage is down by a quarter in those depots furthest along the process." UK bus revenues fell 14 per cent to £490.7m, with most of that reduction attributed to the sale of its London bus business. Rail operations - which encompass ScotRail, Great Western, TransPennine Express, Hull Trains and Capital Connect routes - enjoyed a 3.6 per cent rise in passenger volumes and a 5.7 per cent increase in revenues. O'Toole said there were "big plans" for the ScotRail service, which will be outlined in detail when the company tenders to retain the franchise. FirstGroup currently holds the right to run those operations through to the end of March 2015. The group has scrapped its interim dividend, but outgoing chairman Martin Gilbert said First still expects to pay a final dividend at the end of the financial year. The interim payment was axed in conjunction with the rights issue which the firm launched to stave off a downgrade to its credit rating. Gilbert also announced at that time that he would step down as soon as a replacement can be found, a process that O'Toole said was "well down the way."