HK's Citybus and New World First Bus merge, HK$3.5bn set aside for CX

Public transport operators Citybus and New World First Bus plan to merge into a single company as part of a 10-year franchise renewal by the Hong Kong government. Citybus franchise was reported to have a decreased advertising revenue last year compared to the previous year.

In a statement released on 12 July 2022 from Bravo Transport, owner of the two bus operators, Bravo Transport announced the merger of Citybus (franchise for Hong Kong Island and cross Harbour bus network) and New World First Bus services franchise into the newly created Citybus (franchise for the urban and new territories Network) effective from 1 July 2023.

The company also described the merger as a defining moment in history of Hong Kong public transportation as the two operators become one family under the iconic Citybus brand. The company will invest over HK$3.5billion in the next 10 years, improving the customer experience and providing a comprehensive, fit for purpose network and travel choices serving the entire city. These investments include customer and colleague facilities, the upgrading of existing and creation of new garages and depots along with the ongoing purchase of buses and supporting infrastructure for the company’s business development and zero-emission transformation journey.

The renewal of the Citybus which serves Airport and North Lantau bus network, will be effective from 1 May 2023. Both franchises will last for a period of 10 years, according to the release.

By merging the Citybus and NWFB franchises, the company hopes to utilise all staffs including the many bus captains and mechanics along with buses and facilities more effectively and with maximum efficiency, creating synergies that will deliver improved services to their customers. It also aims to provide the staff with the economies of scale to directly compete with other major players in the industry.

Cliff Zhang, chairman of Bravo Transport, said: "We are grateful for the government's collaboration and ongoing work with us on our proposal to merge the Citybus and NWFB franchise into one single new franchise, Citybus (franchise for urban and new territories network), and the extension of the franchise of Citybus (franchise two),”

“Our aim throughout this process has been to ensure that our operating franchises are prepared and fit for the future. This will allow the company to deliver its strategic vision and operate successfully, whilst delivering wider benefits and security to both employees and citizens. As Citybus and NWFB finally come together under one banner, we can continue our focus on turning Citybus into a top-class public bus operator that will create modal shift onto public transport and importantly return growth to the public transport market, whilst better serving citizens across Hong Kong,” Zhang added.

Decreased advertising revenue for Citybus franchise 

According to the financial statistics of Citybus, the fare receipts for the period from 1 July 2020 to 31 December 2021 is HK$1.69billion, much higher than the previous year. However, the advertising revenue for the period from 1 July 2020 to 31 December 2021 has gone down from HK$73 million to HK$72 million.  The operating cost for the same period is around HK$2.2billion, which increased steeply from the previous year (HK$1.6 billion), of which staff costs, depreciation, fuel and oil, tolls and insurance are all recorded to have sharp increase compared to previous year.

Meanwhile, the advertising revenue of New World First Bus for the period from 1 July 2020 to 31 December 2021 has increased compared to the previous year, even though the operating costs have risen.  

The Transport Department expects to reorganise the bus routes on Hong Kong Island, and will implement the route reorganisation through the annual bus route plan. The department emphasised that some buses with the same route might end up with different fares, "we (the government) will not force passengers to ride on expensive buses," the spokesperson added. He also said that merging some of the routes might affect customers enormously.

The decision to allow a merger of the two franchises, which operated some overlapping services, would enable the city to continue to fine-tune its bus network and allow the owner of the combined firm to deploy its resources more flexibly, he said. Relevant changes to bus routes would be handled by the government’s annual route planning programme, he added.

Online chatters analysed

In terms of sentiments online, social monitoring company CARMA saw a total of 7.7% positive mentions and 12.2% negative mentions from the last 7 days. Most mentions were generated in the last 36 hours.

Charles Cheung, GM of CARMA said: "Majority of positive mentions came from netizens who felt positive toward the merger as they believe it enables better pooling of resources between the two brands, and thus improve financial situation,"

"At the same time, some netizens had an opposite view on the merger. Some questioned if the merger would help Citybus climb out of the red. A number of netizens expressed their empathy toward the NWFB drivers who appeared to be frustrated with the merger as they aren’t familiar with the City Bus route," Cheung added. 

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