Subsidised Hong Kong ferry firms to cut fares due to excessive profits amid low oil prices

Two ferry companies operating routes connecting Hong Kong, Kowloon and the outlying islands will cut fares by around 10 per cent from July as a way of sharing excessive profits from the low oil price, the transport and housing minister said yesterday.

Anthony Cheung Bing-leung said the discount would last for “several months” and the two government-subsidised operators – Hong Kong and Kowloon Ferry Holdings, and New World First Ferry – should work out details based on their profit margins and other factors.

The reduction would apply to monthly tickets and weekday single journeys, he said, but possibly not Sundays or public holidays.

First Ferry charges fares of up to HK$30 on weekdays and HK$43 on Sundays and holidays, while Kowloon Ferry charges up to HK$22 and HK$42.

It is unclear whether the discount will only cover the companies’ six subsidised island routes or all of the routes connecting Hong Kong and Kowloon.

The outlying island routes connect Central with Cheung Chau, Mui Wo, Peng Chau, Yung Shue Wan and Sok Kwu Wan on Lamma Island, plus several inter-island connections.

Due to the falling oil price and the operators’ increased non-fare revenues, First Ferry and Kowloon Ferry recorded profit margins of 9.8 per cent and 21.4 per cent respectively by the end of last year from mid-2014, when the government renewed their licences for three years until 2017.