The Chief Executive in Council today decided that average fare increases for Kowloon Motor Bus (KMB), Citybus and New Lantao Bus will be 4.3%, 7.5% and 6.5%, and that these should be implemented on January 5.

The Government said it had exercised its gatekeeping role by scrutinising applications for fare increases, and stressed that the increases set by the Chief Executive in Council endeavour to minimise impacts on livelihoods while taking into account the financial sustainability of franchised bus operators.

Upon the new fares' implementation, about four-fifths of passengers are expected to pay no more than $0.5 extra per trip, while 95% are expected to pay no more than $1 extra per trip.

During the approval process, the Government examined the franchised bus industry's operating situation, its forecast financial performance, indices relevant to public affordability, and the quality and quantity of operators' services.

It also took into account franchised bus operators' exemption, since February 2019, from paying tolls when using government tolled tunnels and control areas. This policy continues to function, and was a factor in reducing KMB's rate of fare increase this time.

The Government has also assisted franchised bus operators in improving their operational sustainability in recent years. This has included broadening their sources of non-farebox revenues and enhancing operational efficiency through rationalisation of bus routes, with regard to patterns of passenger demand.

After careful consideration of the overall situation, the Government said it is satisfied that suitable adjustments to fares are necessary to help the franchised bus operators continue to operate and invest.

The Government also highlighted that there have been few recent increases in franchised bus fares, with cumulative increases being noticeably lower than changes in the Composite Consumer Price Index (CCPI) and other indices over a corresponding period.

Taking the figures since mid-2008 as an example, after including the fare increases just approved, the cumulative fare increases for the three franchises over roughly 16 years averaged between 1.6% and 2.2% on a yearly basis. Over the same period the cumulative increase in the CCPI averaged 3% on a yearly basis and the cumulative increase in Median Monthly Household Income averaged 4.2% per cent on a yearly basis.

The Government said it will continue to assist franchised bus operators to raise revenue and reduce expenditure through a multipronged approach, including the introduction of tourist services routes with premium features to grasp opportunities presented by the multiple-entry Individual Visit Scheme.