Kowloon Motor Bus says it may have to apply for a fare rise again soon after the government rebuffed its suggestion that public money be used to create a fare-stabilisation fund.
KMB yesterday announced a loss after taxation of HK$16 million for the first half of the year, compared to net profit of HK$135.9 million for the corresponding period of last year. It was KMB's second loss in 12 years.
Transport International Holdings, the bus operator's parent, reported interim net profit of HK$64.3 million. In the period last year it was HK$169.4 million if a HK$489.1 million gain arising from the disposal of an interest in an industrial site in Kwun Tong is stripped out.
KMB blamed higher fuel prices, saying the cost of sulphur diesel jumped 43.1 per cent to an average of US$124.8 per barrel in the six months ended June 30, hitting the group's Hong Kong and mainland operations. KMB's fuel bill surged 37.6 per cent year on year to HK$675.3 million. The group also implemented a 4 per cent wage increase in June.
KMB said the 3.6 per cent fare rise allowed on its 394 routes this year had been insufficient.
'We do not have a view as to the duration and magnitude of the current trend of high fuel oil prices,' KMB said. 'However, if this trend persists and in the absence of other effective mitigation measures, we will have no other choice under the existing mechanism but to seek further fare adjustment in order to maintain the existing service levels.'
Transport International has urged the government to provide a lump sum to set up a fare-stabilisation fund to cushion the impact of fuel prices. Bus operators would take money from it when they failed to make a reasonable return - in KMB's case its permitted 9.7 per cent. They would also put money back when their return was above the agreed rate. The government so far has not met KMB to discuss the idea.