KMB fully appreciates that a fare increase will have an impact on the community, but the fact is that KMB has been facing continued losses and faces disproportionately higher operating pressure compared to other bus franchises.
In the past 11 years, many railway lines have been introduced within KMB's operating area. These include the Tseung Kwan O Line, West Rail (Tuen Mun to Nam Cheong), Ma On Shan Line, Lok Ma Chau Spur Line, Tseung Kwan O Spur Line, and the Kowloon Southern Link.
As a result, KMB's daily ridership has experienced a sharp decline of 500,000 passenger-trips, from 3.1 million in 2002 to 2.6 million today. Currently, the company operates around 400 routes and 70 per cent of them are loss-making.
These loss-making routes are being subsidised by the remaining 30 per cent, which are profitable; this is an unhealthy and unsustainable situation.
To tackle this structural problem, KMB has been working with the government and district councils to reorganise obsolete and lowly utilised routes for greater efficiency. However, the progress of route reorganisation has been slow, with only 5 to 6 per cent of KMB's network having completed its restructuring so far. To effectively alleviate fare pressure, the pace of this network restructuring exercise must be rapid and extensive.
The health of a bus company's network is part and parcel of its ability to withstand operating pressure in an environment of rising costs.
To illustrate this point: Long Win Bus Company Limited, a sister company of KMB managed by the same senior management team, has not applied for a fare adjustment this year because its bus network is still relatively healthy.
KMB appreciates its social responsibility not only in maintaining affordable fares, but also in delivering quality bus services to 2.6 million passengers each day while sustaining the livelihoods of its 12,000 staff.
The company genuinely needs the additional financial resources via its application for a 4.3 per cent fare increase to maintain financial health in 2014.
In the meantime, we sincerely hope that we can work closely with the government and district councils in expediting our route reorganisation efforts.
Evan Auyang, KMB deputy managing director