THE Hongkong Ferry Company, constantly under fire for its poor level of service, said yesterday fares would have to rise by a massive 24 per cent if improvements are to be made. Announcing a $46 million drop in profits, Hongkong Ferry (Holdings) Company president, Mr Peter Wong Man-kong, said: ''If the public want better services, they are going to have pay, it's as simple as that. These are very tough times for the ferry industry.'' The company hopes to have government approval in time for rises to take effect by July - just a year since its last fare increase of 14.3 per cent. But Mr Wong said that with no improvements, fares would only rise by about 12 per cent, to keep pace with inflation during the past 12 months. Last July's increase, although the first in 20 months, met strong opposition from outlying islands residents. District boards and passengers are to be asked next month whether they want improvements at the expense of fare rises. Figures would be produced to show they can expect to pay at least six per cent on top of inflation for improvements to piers, existing ferries and staff and another six per cent for new ferries and new routes in the future. ''If that's what they want, we'll have to push the Government for 24 per cent, it's up to them,'' Mr Wong said. ''We are taking this new approach because we believe our accountability has to be to the passengers first.'' Mr Wong told shareholders during yesterday's annual meeting that bad weather last year and the closure of some routes due to the western Kowloon reclamation had eaten into profits. The number of passengers on routes around the territory had plunged more than five million to a five-year low of 22.7 million last year but turnover edged up more than three per cent to $920 million. The problems, expected to worsen, resulted in a drop in profits of 34 per cent to $88.2 million, with profits from local ferry operations dropping $25 million to $11 million. The results were worse than even the most bleak forecasts, with property rentals responsible for the bulk of profits. But legislator for New Territories West, Dr Tang Siu-tong, said passengers could be expected to battle any fare increases - even inflationary rises. Many Tuen Mun passengers have already criticised plans to charge $25 per trip on two $70 million high-speed ferries now under construction to run to Central and back. Dr Tang praised the company's initiative in seeking to involve the public, but warned passengers to scrutinise all the fine print to ensure they were not being used by the company to pressure the Government. The Government has yet to decide whether to allow the company to develop its pier sites. ''A rise of something like 24 per cent just sounds ridiculous and unreasonable, they should be trying to improve services without such costs,'' Dr Tang, a member of the Legislative Council's transport panel, said.