UPDATE 1-National Express sees strong H2, shares rise

(Adds comments by CEO, analyst, details, share price)

LONDON, July 31 (Reuters) - British bus and rail company National Express Group Plc (NEX.L) said on Thursday it expected a strong second half despite soaring fuel costs and an economic downturn, sending its shares 2 percent higher.

The firm, which has operations in Spain and North America as well as the UK, said some fuel costs could be passed onto customers through fare increases while rail travel was expected to become more popular due to petrol prices.

"Where tickets are deregulated we can do it (pass on fuel costs) through fares ... Customers understand fuel costs are rising and that we are not insulated from it," Chief Executive Richard Bowker told Reuters in an interview, adding that cheap fares were still available through advanced bookings.

He also said a new YouGov poll showed around 60 percent of car users were at least considering using public transport. "We are excited by the potential," he added.

National Express reported first-half pretax profit rose almost 14 percent to 90 million pounds ($178.2 million), and hiked its half-year dividend 10 percent to 12.72 pence.

Shares in the company, down over a fifth this year, were up 2 percent at 999 pence by 1104 GMT, valuing the group at 154 million pounds ($304.9 million).

"We believe the shares are attractively valued," Panmure Gordon analyst Gert Zonneveld said in a note.

National Express runs the East Coast rail link between London and Scotland, but also has transport operations in North America and Spain.

Richard Bowker said the Spanish market was a particularly good opportunity for future growth as state-owned services were likely to be privatised in the next few years.

"We are very well placed to help in the liberalisation of the market and to participate when that happens ... Planning has to start now," he said.

Overall revenues for the six-month period climbed 4.4 percent to 1.4 billion pounds.

(Reporting by John Bowker, editing by Will Waterman and Sue Thomas)