Fare discounts reward loyalty: expert

PUBLISHED : Thursday, 01 June, 2006, 12:00am
UPDATED : Thursday, 01 June, 2006, 12:00am

The fare reduction offered by bus companies to medium- and long-haul passengers is a customer loyalty scheme rather than a genuine discount, according to a veteran transport expert.

Leung Kong-yui said losses shouldered by the bus companies resulting from the fare cut would be less than expected because passenger volumes increased by 2 per cent in March compared with a year ago, when the scheme was launched. This was the first such rise since 2004.

His comments followed strong criticism of transport authorities after figures showed fewer than 5 per cent of bus passengers benefited during the scheme's first full month of operation.

Mr Leung, a transport consultant and former member of the Transport Advisory Committee, estimated that the four bus operators would lose between $55.2 million and $78.5 million in revenue a year.

This meant each of the 5,700 buses owned by the four operators would lose an average of between $26.9 and $38.2 in revenue per bus each day, Mr Leung said.

However, he said the actual loss among the operators would be less than that. 'There were 2.5 million more bus passengers in March and this will make up for part of the loss.'

The fare cut is a key part of the new bus-fare mechanism launched in February, but commuters can only benefit if they return on the same day on the same route.

'Remember, most of these medium- and long-haul routes on discount are facing stiff competition from trains. The data also proved that not many people leave and go home by taking the same route. I would say this is a passenger loyalty scheme rather than a fare discount,' Mr Leung said.

Transport Department figures showed only 5.4 million passengers enjoyed the discount of 5 to 10 per cent in its first full month of operation, which was just 4.46 per cent of a total of 121 million passengers, or 36 per cent of 15 million eligible commuters.

In a detailed breakdown, 1.9 million out of 4.8 million long-haul travellers enjoyed 10 per cent fare discounts, while 3.5 million out of 10.2 million medium-haul commuters got the 5 per cent discount.

Some long-haul passengers yesterday said it was difficult to get the benefits.

April Wong Hoi-po, a 26-year-old clerical officer from Tuen Mun, said she did not take the bus to work in Tseung Kwan O because of traffic congestion, but did take it home.

'This discount scheme is not attractive,' she said. 'I can only get it two to three times a month when I go to Causeway Bay during weekends.'

Travelling Light

Bus passenger figures for March 2006*

Total passenger journeys 121m

Journeys eligible for 10% discount (fares over $15) 4.8m

Journeys taken using 10% discount 1.9m

Journeys eligible for 5% discount (fares of $10-$14.90) 10.2m

Journeys taken using 5% discount 3.5m

Total passenger journeys eligible for fare discount 15m

Total journeys using fare discount 5.4m

Percentage of journeys where discount was used 4.46%

Bus firms? maximum loss through fare discounts $6.54m

(i.e. if all passengers paid maximum fare) (equivalent to $78.5m a year)

Bus firms? minimum loss through fare discounts $4.6m

(i.e. if all passengers paid minimum fare) (equivalent to $55.2m a year)

Buses run by the four companies

Maximum average fare loss per bus $1,147

Equivalent per day $38.2

Buses run by the four companies About 5,700

Minimum average fare loss per bus $807

Equivalent per day $26.9