HONG KONG: Hong Kong’s four franchised bus operators have appealed to the government to raise fares by up to 17.7 per cent, citing "significant financial pressure and operational difficulties" arising from increased fuel prices amid the war in the Middle East.
In a paper submitted by Hong Kong’s Transport and Logistics Bureau to the Legislative Council on Wednesday (Oct 14), the bureau said the sharp increase in diesel pump price in the past few months have imposed an "additional burden" on bus operators, which predominantly use diesel.
Citybus sought the highest increase at 17.7 per cent, followed by Kowloon Motor Bus Company (KMB) at 16 per cent. New Lantao Bus sought a fare increase of 9.8 per cent, while Long Win applied for an 8.1 per cent rise.
Information provided by the four operators showed that their fuel costs surged by about 75 per cent to 134 per cent in March this year compared to January, pushing fuel expenditure up by 85 to 132 per cent over the same period.
"Amid the uncertain trajectory of the war in the Middle East, oil prices are expected to remain at a relatively high level, persistently affecting the financial position of all (franchised bus operators)," the bureau said.
The paper showed that the four bus companies recorded profits ranging from HK$7.92 million (US$1 million) to HK$369 million in 2025. However, all four estimated they recorded a substantial decline in profit in the first half of 2026.
When assessing the financial performance of the bus operators, the bureau said the government needs to consider striking a balance between the "financial sustainability and capability" of the companies to provide "safe and quality franchised bus services" and "public acceptability and affordability", as well as the impact on passengers.
The bureau proposed that the Hong Kong government reduce a proposed fare increase or reject the application if it considers the increase excessive.
Hong Kong secretary for transport and logistics Mable Chan said that the government would play the role of gatekeeper when assessing the applications and would take public affordability into account, the South China Morning Post reported.
"We attach great importance to the service reliability and financial sustainability of the bus companies. At the same time, we are equally concerned about affordability for the public. We will certainly perform our gatekeeping role well," Chan told reporters on Wednesday.
"We will take various factors into account. In particular, we will examine the franchised bus companies’ coming operating situation, cost and revenue projections, long-term financial outlook, and the impact on services."
SHARP FUEL COSTS "SEVERELY IMPACTED" OPERATING FINANCES
Responding to media queries, KMB and Long Win told SCMP that the sharp surge in fuel costs has "severely impacted" their operating finances.
"Refined oil prices remain persistently high and subject to extreme volatility," the companies said in a joint statement.
Without government subsidies, they said their operational conditions had been affected despite implementing cost-control measures.
The paper submitted by Hong Kong’s transport bureau showed that KMB recorded a post-tax profit of HK$369.92 million in 2025. However, it estimated a 55 per cent drop in profit for the first half of 2026.
Meanwhile, Long Win saw an estimated 31 per cent drop in profits as of June, despite recording a post-tax profit of HK$46.44 million in 2025.
New Lantao Bus saw the highest drop in profits, recording an estimated 129 per cent drop in the first half of 2026, having recorded a post-tax profit of HK$7.92 million last year.
In a statement, Citybus said its application for a fare increase has been "carefully considered" to balance public demand and the company’s financial sustainability, due to a significant surge in fuel prices and rising operating costs over the past two years, SCMP reported.
The company had made a post-tax profit of HK$39.02 million in 2025 but estimated a 52 per cent fall for the first half of 2026.
Citybus said the fluctuations in international refined oil prices caused by the Middle East situation were "far greater" than those in crude oil prices, resulting in a more direct impact on franchised bus companies.
"Experts estimate that international refined oil prices are unlikely to return to pre-conflict levels in the short term," it said.
The transport bureau noted that passenger journeys on franchised buses have yet to return to pre-pandemic levels. The industry saw an average of daily passenger journeys of more than 3.7 million in 2024 and 2025, lower than the average of about 3.92 million from 2010 to 2019.
“Such passenger figures reflects the competition faced by the franchised bus industry from other public transport modes, as well as the structural changes in the travelling pattern of passengers.”
The operating environment of the bus operators is also expected to remain challenging, owing to factors such as competition from other public transport modes, continuously rising operating costs and wages, as well as high oil prices due to disruptions to the fuel supply chain.
“It is necessary for (franchised bus operators) to further strengthen their financial positions and long-term financial sustainability so as to continue providing proper and efficient bus services,” the bureau said.
It added that the Hong Kong government “holistically take into account all factors” when considering the applications, including oil prices as part of the operating cost.
“Should the oil prices change in the future, the relevant factors will be fully considered in subsequent fare increase applications.”
FARE INCREASES WOULD PLACE “HEAVY FINANCIAL BURDEN”
Hong Kong politician Ben Chan Han-pan said the proposed increases were “exceptionally high” and called on the Executive Council to scrutinise the applications, SCMP reported.
He said that the fare increases would “undoubtedly place a heavy financial burden” on the public and disrupt their daily lives.
If the government did not reintroduce subsidies for the operators, it might be “difficult to suppress” the final approved fare increases, Chan said.
“This could force companies to cut service frequencies, impacting citizens’ daily commutes,” he said.
Michael Tien Puk-sun, an ex lawmaker, said the franchised buses fare adjustments should be linked to an annual transparent mechanism similar to the MTR’s fare adjustment formula, which is based on a basket of indicators such as inflation, wage changes and productivity factor, SCMP reported.
“This formula provides the best approach, avoiding the current process where the Executive Council reviews applications and triggers multi-year debates,” said Tien, who is also a former chairman of the Kowloon-Canton Railway Corporation.
Last January, Hong Kong’s Executive Council gave KMB the green light to raise fares by 4.3 per cent, and New Lantao Bus and Citybus by 6.5 per cent and 7.5 per cent, respectively.
Hong Kong’s Legislative Council’s transport panel will discuss the fare-increase proposals on Friday, SCMP reported.
After seeking the views of lawmakers and the Transport Advisory Committee, the government will then submit its recommendation to the Executive Council for final approval.