ComfortDelGro braces for lower bus earnings as fare cuts bite

But rail revenue will come to the rescue.

Transport operator ComfortDelGro said that it expects its bus revenue to decline this year, on back of the 1.9% fare reduction imposed by the Land Transport Authority (LTA).

However, revenue from its rail business is expected to be higher this year due to contributions from the newly-launched service of Downtown Line Stage 2, which will be offset by the reduction in fares of 1.9%.

In terms of its overseas operations, revenue from the bus business in Australia is expected to be maintained while revenue from the UK bus business is expected to be higher from new services. Meanwhile, revenue from the bus station business in Guangzhou is expected to be lower with competition from the high speed rail network.

“2015 was a challenging year with strong competition faced by all our businesses. With the global uncertainties, we expect the current year to be no less challenging,” said ComfortDelGro Managing Director/Group CEO Kua Hong Pak.