TERRORIST attacks are putting train passengers off using services, a travel operator has claimed.

The Stagecoach Group says its rail division, which includes the Virgin East Coast venture, has been dented.

It revealed terror concerns, allied to weaker consumer confidence, lower fuel prices and competition from air and road travel, have created a difficult trading environment.

Working under the Inter City Railways banner, Stagecoach and Virgin last year took on the East Coast route in a joint venture from the publicly-run Directly Operated Railways.

According to latest results, the partnership saw like-for-like revenue rise 4.9 per cent in the 48 weeks to April 2.

However, a spokesman warned the sector remains very difficult.

He said: “The outlook for rail is more challenging than this time last year and the overall industry rate of revenue growth has slowed in recent months.

“We will take further steps to mitigate the effects, focusing on cost control and additional initiatives to grow revenue.”

The Stagecoach and Virgin venture will use rolling stock made at Hitachi Rail Europe’s factory in Newton Aycliffe, County Durham, from 2018.

In its regional bus division, which includes services across Teesside, Hartlepool, Sunderland and Newcastle, revenue growth was just 0.2 per cent higher.

Bosses say they will keep fare increases to a minimum as they look to attract passengers and lure back former travellers.