National Express today said it was on course to meet its 2012 targets as new routes helped it drive an improvement in coach passenger volumes.

The coach division, which covers 1,000 destinations in the UK, is expected to see passenger volumes rise 4% in the year to December 31 after routes were added between Liverpool airport and Leeds, Liverpool and Newcastle and Ipswich and Heathrow.

Revenues from non-concession passengers lifted 2%, while last year's withdrawal of government subsidy was offset by a good performance during the Olympics.

Meanwhile, the bus division, which operates mainly in the Midlands, saw revenues increase 4%, boosted by the popularity of its new travelcard product.

Group chief executive Dean Finch said: 'The group remains on course to deliver its 2012 targets, despite the significant challenges of prevailing economic conditions and government austerity measures.'

Shares in the group were 2pc higher after the trading update was published as the group said it was on course to meet full-year expectations.

The company has secured �500m in new contract revenues throughout the financial year.

Its rail division - which lost the East Anglia franchise earlier this year - restated that c2c, its London, Tilbury and Southend rail operator, is the 'best-performing' franchise in the country with a public performance measure rating of 97.4pc.

But with the franchise-bidding process suspended in the wake of the West Coast mainline fiasco, there was little in the way of further updates.

In Spain, its Alsa business grew revenues by 3pc, while North American underlying revenues increased by 3pc.

The group will announce its full-year results on February 28.