Interim Management Statement

Since we reported Interim Results on 27 August 2009 the grouphas continued to trade in line with management expectations.

Across the business we have taken, and continue to take, stepsto manage our cost base and respond to changing market conditionsin ways that will benefit Arriva into the future.

In CrossCountry, our business with the greatest sensitivity topassenger revenue growth, consistent growth has resumed in recentweeks following occasional weekly declines over the summer breakperiod.

As anticipated, trading has been affected by a fuel costincrease, which will amount to around £60 million in the fullyear, weighted towards the second half.

UK Bus

Revenue growth, adjusted for the number of trading days, was 4.9per cent for the division in the nine months ended 30 September,similar to the like-for-like growth experienced in the first halfof the year. Targeted reductions have reduced commercially operatedmileage by 3.3 per cent year-on-year in the same period, improvingyield per mile. Mileage in our contracted London division grew by3.0 per cent.

UK Trains

Passenger revenue growth for the 42 weeks ended 24 October was1.3 per cent for our CrossCountry franchise, although for the lastsix weeks it has been 3.8 per cent. Passenger revenue growth was6.7 per cent for Arriva Trains Wales, for the same 42 week period,after allowing for timetable changes in December. Both franchiseshave continued to provide excellent operational performance. Costreduction measures already put in place will contribute annualisedsavings of approximately £15 million.

Mainland Europe

Revenue in our Mainland Europe division, expressed in euro, grewby 7.6 per cent in the nine months ending 30 September. Excludingthe effect of acquisitions made in 2008, revenue growth was 3.5 percent.

Though it has a lower proportion of passenger revenue thanthe other divisions, the effects of the economic downturn are beingfelt, particularly in our commercial operations in Portugal.

Financial position

The group’s financial position remains robust, withcontinuing strong cash generation and significant undrawn bankfacilities. The group’s principal facility, a £615million revolving credit facility, does not expire until mid2012.

The group’s forward fuel fixing for 2010 is substantiallycomplete, with 15.9 per cent of the anticipated 520 million litreannual fuel requirement protected by indexation arrangements, and76.5 per cent forward purchased at an average price of 36.2 penceper litre. Excluding the impact of fuel taxation and deliverycosts, this is expected to reduce fuel costs by around £30million in 2010. For 2011, 36.5 per cent has been forward purchasedat an average price of 31.6 pence per litre.

Outlook

In the short term we continue to focus on meeting the challengesposed by economic conditions. Our careful targeting of costreduction measures anticipates the beneficial impact of fuel costreductions from 2010 and, from November 2011, protection fromshortfalls in projected passenger revenue in the CrossCountryfranchise.

The business development environment remains positive withnumerous tendering opportunities under evaluation in the hugeEuropean public transport market. With consistent evidence of theimproved value for money available to governments from thecompetitive tendering of urban and regional transport, the marketcontinues to present Arriva with opportunities for long-termgrowth. We remain confident in the underlying strength and growthpotential of the business, and the prospects for the delivery oflong-term value to shareholders.

The group is scheduled to issue its pre-close statement for theyear ending 31 December 2009 on 17 December 2009.