Headed for merger

Bus giant Bravo Transport may merge its subsidiaries Citybus and New World First Bus under one franchise as the Executive Council is expected to discuss franchise-renewal procedures for bus companies at a meeting today, sources said.

The potential merger will last 10 years before reapplication is necessary, the sources added.

It is also expected to give Bravo more flexibility in deploying its fleet and drivers since, thus far, bus captains are only allowed to drive buses within the same franchise and could not be deployed across operators.

This proves especially challenging during special occasions and public holidays, when bus schedules require flexibility among drivers.

Word of the merger came after Bravo recorded a deficit of HK$260 million in 2020. Additionally, during the two-year run-up to January, it suffered an average monthly deficit of HK$25 million.

Bravo currently owns three operators - one under New World and two under Citybus.

Two of them operate on Hong Kong Island and the cross-harbor network while the third services the airport and North Lantau. Bravo's franchise agreement will expire midway through next year. Sources said that as part of the renewal procedures, the company has applied to combine its subsidiaries.

The two operators were previously owned by NWS Holdings under property giant New World Development. They were sold to Bravo for HK$3.2 billion in 2020.

Since then, the two Citybus franchises have a combined total of 1,017 buses running on 121 routes while New World has a total of 681 buses on 93 routes.

Patronage of Citybus dropped significantly in 2020 to 189 million from over 224 million the year before. The figures for New World were not much better, with patronage sliding to 145 million from 168 million.

The decline in patronage has also affected commuters as Citybus and New World had their fares raised by 12 percent last year, with authorities citing the decrease in revenue and rising operation costs.

Simon Lee Siu-po, an honorary institute fellow at Chinese University's Asia-Pacific Institute of Business, said: "If the scale of operations cannot reach a certain level, the fixed costs would be wasted.

"If the resources can be used well after the merger, the passengers will benefit."

However, Lee admitted it is unlikely bus fares will go down immediately after the merger, noting it may take several years.

Lawmaker Ben Chan Han-pan from the Democratic Alliance for the Betterment and Progress of Hong Kong said authorities should consider the operation of bus companies and passenger needs before approving the franchise renewal.

He said: "I hope Exco can be a gatekeeper in setting a ceiling on fare increments and require them to incorporate smart technologies in reporting bus schedules."

The franchise for Long Win Bus, which has 241 buses running on 38 routes across Lantau Island and the New Territories, will also expire next year. Exco is expected to discuss its renewal at today's meeting.

Meanwhile, tram fares will be increased to HK$3 from HK$2.60 for adults starting today.

Children under 12 will see their fare go up to HK$1.50 from HK$1.30 and elderly people from HK$1.20 to HK$1.30.

Monthly passes will also become HK$40 pricier at HK$260 while tourist tickets will be canceled.