Stagecoach says its core market of passengers must be protected

Bus fares are to rise by about 7% on services operated by Stagecoach, the county's biggest bus company.

The company said the increase in May was necessary because the amount it receives from local councils has been substantially reduced.

About 40% of Stagecoach Devon's 25 million passengers travel free as they are over 60 or have disabilities.

Last year the company was given about 87p for each concessionary fare, but this is going down to 67p.

Routes examined

Government funding takes into account deprivation rather than the number of pensioners in an area, so the Devon scheme is suffering through its own success.

Chris Hilditch, the managing director of Stagecoach Devon, told BBC News the company was in a very difficult position.

"We need a certain amount of money to run the buses," he said.

"If the authorities say 'we can't afford to pay you', then we have to make adjustments."

He added that the company had a duty to protect its core market of fare-paying passengers.

Stagecoach said axing whole routes was not on the agenda, but services which carry only those getting free travel would go under the microscope.

Earlier this month, Torbay Council announced it was withdrawing from Devon's concessionary bus fares scheme for pensioners because it was too expensive.

Mid Devon District Council is also considering pulling out of the scheme.