THE lacklustre performance of Go-Ahead's aviation business is expected to improve this year, the Newcastle-based transport group said yesterday.

Go-Ahead expects increased profits at the ground handling division in the six months to January 1. It said the improvement would reflect the benefits of its acquisition in August of rival business Plane Handling from Virgin Aviation.

It said other business opportunities at Heathrow and management changes at Gatwick had also helped.

The company said: "While there is much to be done, the group is currently on track to improve the profitability of this business significantly during the year."

Go-Ahead, which also runs buses and trains, said its bus division had continued to perform well. Revenues rose and margins were stable, with advance buying of fuel helping to offset rises in oil prices.

In Newcastle and the North-East, it implemented initiatives to reduce costs and improve margins.