22 November 2013

SMRT Going to Increase Fares

Source

As "predicted" (it's obvious to everyone anyway), SMRT is going to increase fares to bring in more profit, that's very much expected since they will be increasing bus drivers' salary and that means more "operating expenses". This year seems to be a bad year for them, Jan-Mar, they made a loss of $12.049 million, Apr-Jun, profit was $16.328 million, but down 55.2% from same period in 2012, Jul-Sep, profit was $14.304 million, down 57.1% from same period in 2012, for their coming Oct-Dec report, I think should also be "no eyes see".

From a social point of view, increasing bus drivers' salary is a good thing, you increase their spending power which will also improve their quality of life, but from a financial perspective, this is not good for the company which is already struggling with incredibly high "operating expenses". But then again, to provide better services, spending more on staffing is necessary, this also helps to provide more jobs for the country which is also a good thing as a whole. I can only say too bad for investors, no more high dividend yield.

I don't mind them increasing the fares as long as they keep it reasonable, I think most likely both bus and MRT fares will increase, but I wonder what the future holds for this company, if you ask me, I think it is dying slowly but surely at this rate, and the only thing that can keep them afloat is to keep on increasing fares, or cut costs, not easy to be the CEO at this time, but actually not easy to be the CEO of a public service company, you will always be in a dilemma, on one hand you have to bring quality and affordable service to the public, on the other hand you have to answer to investors and major shareholders, damn headache.

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