DRIVER shortages at transport company Go Ahead has seen the plc recruit more than 80 workers from Poland to work in the North-East.

Group finance director Ian Butcher said that bus drivers' wages would rise in the region over the next year in a bid to attract more employees.

High turnover of staff and troubles recruiting drivers has led the Newcastle company to look at increased pay settlements to retain staff, as well as recruiting from Eastern Europe.

More firms have been turning to Poland and the Czech Republic to combat skills shortages in UK industries.

Shipyard bosses at A&P employed about a dozen Polish workers on the Tyne and a similar number in its Tees yard earlier this year, sparking outrage from unions.

And in April, Station Taxis, in Darlington, said it had brought in drivers from the Czech Republic after struggling to recruit locals.

Meanwhile, Go Ahead, which operates bus services across the North-East, yesterday unveiled a dip in profits at its bus division following a rise in fuel costs and a surprise cooling in passenger demand. It said margins weakened over the year to leave the division's profits in the 12 months to July 2 at £52.4m, compared with £54.2m a year earlier.

Across the group, which also has interests in the Southern and Thameslink rail franchises, profits were slightly ahead of expectations at £95.9m, compared with £91.3m a year earlier.

Much of the improvement was due to a sharp recovery in the performance of its aviation services business, which achieved profits of £6m against £600,000 last time.

Group finance director Ian Butcher said the aviation business, Aviance, had also been helped by a surge in passenger numbers at Durham Tees Valley Airport, where it has a strong presence in ground handling.

In the bus division, growth in turnover to £412.9m was offset by a rise in labour costs of 7.8 per cent, while the cost of fuel per operating mile increased by 30 per cent in the year, adding £6m to the overall cost of the bus operation.

Mr Butcher said for every penny increase in the cost of diesel, it cost Go-Ahead £1m over the year.

Unlike fellow operator Arriva, the company has not fully hedged its fuel costs for next year.

But Mr Butcher said the rise in fuel prices and the costs of running cars could have an advantage for Go-Ahead by driving private motorists on to public transport.

In the trains division, profits of £39.3m were slightly lower than the £40.9m recorded last year, when figures included £3.8m from the operation of the Thames Trains franchise.