The Sars outbreak took a toll on Kowloon Motor Bus Holdings (KMB) last month, forcing fare revenues to drop 20 per cent year on year. Managing director John Chan Cho-chak yesterday painted a gloomy picture for the prospects of Hong Kong's largest franchised bus operator due to the uncertainty over when the Sars cloud would dissipate. Like other mass transport carriers, KMB was dealt a blow by last month's school suspension and people's reluctance to use public transport. Although school classes had resumed and consumers had started to return to shopping centres and restaurants, KMB had still suffered a 15 per cent fall in fare revenues in the past two weeks, Mr Chan said. 'Many people are still not confident enough to get out of their homes. We just hope their lives will return to normal as soon as possible,' he said. KMB has yet to follow the lead of rail operator MTR Corp, which has offered a string of promotions to spur travel in the wake of the Sars outbreak. Mr Chan did not think fare promotions would necessarily bring passengers back on board KMB buses. 'We're not like a retailer which can spur sales by cutting prices,' he said. 'We have been in the franchised bus business for 70 years, and statistics show that no matter how much we cut or raise fares, there is limited impact on demand.' Mr Chan said KMB had felt the pressure to raise fares but had refrained from doing so in the past five years. It was facing an increasingly tough operating environment, with fuel costs surging on the back of a 90 per cent rise in oil prices in the past five years while labour costs had gone up an accumulative 7.9 per cent. Tunnel fees had also risen 17 per cent annually. He said another problem was competition from trains. 'We're losing 100,000 passenger trips every day to MTR's Tseung Kwan O rail line.'