Australian rail and bus operator Stagecoach suffered a decline of £3.4m in operating income at its British rail franchise in the period between January and April 2009.

The decline is due to a drop in the number of passengers. That has been most significant in the South West Trains franchise operating from London’s Waterloo station.

An ongoing dispute with the Department for Transport over subsidy payments for the South West Trains franchise could cause further losses to the company if the matter does not get resolved, Stagecoach said.