A flurry of cheap travel offers helped coach operator National Express overcome the withdrawal of senior citizen subsidies for the first time in September.
The company has discounted fares, added new routes and overhauled timetables in an effort to offset the loss of an estimated one million journeys a year due to the axing of government support on pensioner tickets.
It is also facing "intense" competition on rival rail lines but National Express reported a return in passenger volume growth in September and said non-concessionary journeys were up 4% in the year-to-date.
The company admitted it had been a difficult year for the coach business, which is facing a £15 million hit from the loss of the subsidies.
It is also experiencing tough trading conditions in Spain, where its Alsa business saw a 2% drop in intercity travel as families cut back on leisure trips in the face of the country's economic crisis.
This has been offset by a strong performance in its UK bus division, with total revenues up 3% in the third quarter of the year. Its c2c London commuter rail franchise benefited from the Olympics and Paralympics after it laid on an additional 1.5 million seats.
Chief executive Dean Finch said the company continued to deliver a "robust" performance, despite austerity pressures on public and consumer budgets.
The comments failed to ease the concerns of City investors as shares in National Express fell by 5%.
Panmure Gordon stockbrokers said it appeared that market conditions have deteriorated in the third quarter, while Investec Securities warned it could reduce its earnings forecasts for next year by as much as 10%.
Analyst John Lawson added: "National Express is battling some tough headwinds, especially in Spain, and whilst the overall group performance is broadly resilient increased costs, such as fuel, and reduced subsidies are not helpful."