4
The 27.8% increase in patronage resulted from a 19.6% increase in adult patronage and 117% in child/student ridership. In absolute terms the adult ridership increased by 101,000 and the child/student ridership by 55,000. There was also a significant switch from single ride to stored value tickets and the proportion of total rides undertaken on stored value tickets increased from about 14% in April to around 50% in December.
5
After the fare adjustments on 3rd May 1981 the single ride average fare increased by about $0.22 while the stored value average fare was slightly lower because of the purchase price and off-peak discounts. The child/student average fare was down considerably and overall the average fare paid by all passengers remained the same at approximately $1.86 (before allowing for the Government reimbursement for cheaper child/ student tickets). Because the average fare remained the same, the revenue increase was in line with the patronage increase, i.e. about 28%, again before allowing for Government reimbursement.
6
After taking into account Government reimbursement for child/student fares, which is estimated to amount to $41.1 million for the period from September 1981 to August 1982 weekday revenue increased during the year by 38% of which two-thirds was attributable to the increase in adult ridership and one-third to increased child/student ridership.
The Existing Situation and Reasons
for Fare Increase in 1982
7
..
The Modified Initial System of the railway has now been in operation for some two years and during these initial operating years, as anticipated, losses have been incurred while the number of passengers carried daily builds up to a level where cashflow is positive. The cumulative losses of the Corporation arising from railway operation during the first two operational years have amounted to $1,228M. However, these losses have been partly offset by property development profits totalling $613M with the result that total net losses carried forward at 31st December 1981 after taking into account a reserve against possible exchange losses made in 1980, amount to $995M.
8
During 1981, the number of passengers carried on a typical weekday increased from 562,000 in January to 718,000 in December and the Corporation has in recent months approached a cashflow breakeven position at what amounts to 72% of capacity on the Modified Initial System alone predicted at 1 million passengers a day. The Tsuen Wan Extension opens in May 1982 and for a limited period losses will increase until the load factor on this extension builds up to the necessary level to allow a cash break-even and thereafter a positive cashflow. It is anticipated that the build-up of traffic on the Tsuen Wan Extension will be more rapid than on the Modified Initial System.
CONFIDENTIAL
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