My schedule is more flexible with the. Enhanced Train Services. Shared Journeys. MTR Corporation
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1 My schedule is more flexible with the Enhanced Train Services. Shared Journeys 26 MTR Corporation
2 You will find a new Public Toilet over there! It s convenient to take the new to the station! Lift Annual Report
3 Executive Management s Report MTR s sustainable transport system underpins the Hong Kong economy Hong Kong Transport Operations Added 1,200 Train Trips per week Added 231 Seats at 50 stations Train frequencies of Airport Express improved to 10 minutes 28 MTR Corporation
4 Total patronage on our Domestic Service reached a record 1,431.0 million, a 4.7% increase over 2011, supported by solid economic growth and increased tourist arrivals. Our Domestic Service comprises the Kwun Tong, Tsuen Wan, Island, Tung Chung, Tseung Kwan O, Disneyland Resort, East Rail (excluding Cross-boundary Service), West Rail and Ma On Shan lines. The Cross-boundary Service to Lo Wu and Lok Ma Chau reported patronage of million in 2012, a 5.6% increase over Passenger traffic on the Airport Express increased by 7.6% as compared with 2011 to 12.7 million, supported by an increase in air travel to and from Hong Kong as well as service frequency enhancement. Passenger volume on Light Rail and Bus services in 2012 was million, a 3.9% increase over 2011, while patronage on Intercity service was 4.0 million, increasing by 6.4%. Average Weekday Patronage Average weekday patronage for all of our rail and bus passenger services in Hong Kong rose by 4.5% to 5.07 million trips in Excluding Intercity service, average weekday patronage would have increased by 4.5% to 5.06 million trips. The Domestic Service again accounted for the majority of this patronage, recording a rise of 4.5% to 4.15 million trips per weekday. Market Share The Company s overall share of the franchised public transport market in Hong Kong increased further in 2012 to 46.4%, as compared to 45.4% in Within this total, our share of cross-harbour traffic rose to 66.7% from 66.2%. Our market share of Cross-boundary business declined slightly from 54.5% to 54.2% due to strong competition, particularly from buses. The Company s market share to and from the airport was maintained at 21.8% for Our transport operations in Hong Kong performed well in terms of both operational and financial results. Financially, total revenue in 2012 from our Hong Kong transport operations, comprising predominately fare revenue but also including rail related ancillary income, was HK$14,523 million, a 7.5% increase over Operating costs of our Hong Kong transport business increased by 6.5% to HK$7,829 million, resulting in the operating profit for this business increasing 8.8% to HK$6,694 million, with an operating margin of 46.1%. Patronage Total patronage from all of our rail and bus passenger services in Hong Kong grew by 4.7% to a record 1,770.6 million in Excluding Intercity service, total patronage would have increased by 4.7% to 1,766.6 million. The Operations Control Centre plays a key role in ensuring efficiency Annual Report
5 Executive Management s Report Hong Kong Transport Operations Market Shares of Major Transport Operators in Hong Kong The Company s overall market share increased from 45.4% in 2011 to 46.4% in (Percentage) 11.5 Market Shares of Major Transport Operators Crossing the Harbour The Company s market share of cross-harbour traffic rose to 66.7%. (Percentage) MTR Buses Ferries Market Share of Airport Express The proportion of air passengers using the Airport Express maintained at 21.8%. (Percentage) MTR KMB Other buses Green minibus Trams and ferries Airport Express Other Fare Revenue Total Hong Kong fare revenue in 2012 was HK$14,389 million, a 7.7% increase over Of this total, Domestic Service accounted for HK$10,035 million or 69.7%. Average fare per passenger on our Domestic Service increased by 2.9% to HK$7.01. Fare revenue of the Cross-boundary Service for 2012 was HK$2,847 million, an increase of 8.1% over Fare revenue of the Airport Express was 5.9% higher at HK$795 million. Average fares per passenger on the Cross-boundary Service and the Airport Express were HK$25.95 and HK$62.59 respectively. Light Rail and Bus fare revenue in 2012 was HK$578 million, a 5.7% increase over 2011, while fare revenue from Intercity was HK$134 million, increasing by 6.3%. Under the Fare Adjustment Mechanism ( FAM ), on 17 June 2012 a weighted average increase of 5.4% was made to applicable fares. This adjustment was accompanied by a package of fare promotions which included the popular Ride 10 Get 1 Free, 10% Discount for Every Same-day Second Trip, Tung Chung Hong Kong Monthly Pass, Free Child Travels on Weekends and Public Holidays, and HK$20 MTR Shops coupons for monthly pass purchasers. Under our Operating Agreement, the FAM can be reviewed once every five years and Government initiated discussions on such a review in August In the review process, we recognise the importance of a fair and transparent mechanism that is acceptable to stakeholders, including shareholders and the travelling public. We continue to discuss with Government on this review in order to reach a solution acceptable to all stakeholders. Promotions and Concessions A number of other promotions were offered to attract people to use our network and support patronage and revenue growth. Several schemes were introduced to underpin the attractiveness of our cross-boundary services. A Lok Ma Chau advertising campaign was launched in December 2012 to encourage more leisure travel on the Shenzhen via Lok Ma Chau Station, including advertisements and a travel e-book highlighting attractions in Shenzhen. At the same time, a similar advertising campaign was initiated in Guangdong Province to promote travel to Hong Kong via Lok Ma Chau Station. In addition, a 20% fare discount was offered between April and June 2012 for passengers travelling to Lok Ma Chau Station from catchment areas with a lower ridership including most Island Line stations. To encourage more tourists to use our services, a tourist ticket promotion was introduced during the year, encompassing discounts at major local attractions such as Ngong Ping 360, Hong Kong Disneyland, Madame Tussauds and sky100. Other tourist ticket promotions included special editions of tourist tickets for Ocean Park and special offers from MTR shopping malls. 30 MTR Corporation
6 Passengers and Fares (Hong Kong Transport Operations excluding Intercity) Economic growth and buoyant tourist arrivals supported the increase in fare revenue and patronage. Fare Trend In past years, MTR fares have consistently lagged behind the growth in Hong Kong payroll but were in line with the long-term changes in consumer prices in Hong Kong , ,800 1,700 1,600 1,500 1,400 1,300 1,200 1,100 1, Number of passengers (million) (right scale) Hong Kong Fare Revenue (HK$ billion) (left scale) Average fare (HK$) 1,200 1, HK Payroll Index (avg. 8.01% growth p.a) Consumer Price Index (A) (avg. 4.59% growth p.a) MTR System Average Fare (avg. 4.22% growth p.a) To promote travel on the Airport Express, we partnered with major financial institutions and offered discounts to passengers who purchased tickets online with designated credit cards. We also successfully launched a group tickets promotion, offering instant gifts, travel packages to various destinations plus lucky draw prizes. Free rides were provided for children during the main holidays, which helped generate incremental ridership. We now have more than 1.3 million MTR Club members. A bonus point scheme was launched between April and July 2012 to encourage our Club members to ride and shop within the MTR network and malls. The MTR network carries about 5 million people per weekday efficiently and safely Annual Report
7 Executive Management s Report Hong Kong Transport Operations To encourage passengers further to use our train service, two new fare saver machines were installed during the year, bringing the number of such machines operating in Hong Kong and Shenzhen to 33 as of 31 December Benchmarking Comparisons MTR Corporation maintained its strong position, particularly in service reliability, against international benchmarks. MTR performance vs. Best Performance Service and Performance In 2012, we again well exceeded the targets set out in the Operating Agreement and our own more demanding Customer Service Pledges. Even though more trains operated than ever before, our train reliability continued to improve and was in fact the best we have had since the rail merger. Furthermore, train service delivery and passenger journeys on-time across the network were all at 99.9%, a standard that puts MTR among the very best railways in the world. We also performed well in the CoMET international benchmarking. Service reliability (passenger journeys on time) Punctuality (percentage of trains on time) System utilisation (passenger km per capacity km) Density (number of passengers per track km) Best Performance = The new entrance at University Station is one of many service improvements 32 MTR Corporation
8 The Airport Express is a fast and convenient option for air travellers Our service excellence was recognised in numerous local and international awards, some of which are listed in the table below: Awards Received in Hong Kong Sing Tao Excellent Services Brand Award 2011 Category Award of Public Transportation Hong Kong Service Awards 2012: Hong Kong Service Awards Public Transportation Category Outstanding Honours Award in Corporate Social Responsibility Category Corporate Social Responsibility Award Top Service Awards 2012 in the Public Transportation Category Reader s Digest Trusted Brands Platinum Award (Public Utility Provider Category in Hong Kong) Hong Kong Star Brands Award 2012 (Enterprise) Best App by Government/Community Mob-Ex Silver Award 2012 (for MTR Mobile App) Organisation Sing Tao Daily East Week Magazine Next Magazine Reader s Digest Hong Kong Small and Medium Enterprises Association and Hong Kong Trade Development Council Marketing Magazine Awards Received Outside of Hong Kong Best Asia-Pacific and Best Customer Experience Initiative Customer Service Excellence Award (for Airport Express) Award for Brand Excellence in Guangzhou-Hong Kong Leisure Travel Service (for Ktt service) Organisation rail Awards in London, UK Global AirRail Awards 2012 in Stockholm, Sweden Tourism Administration of Guangzhou Municipality, Mainland of China Annual Report
9 Executive Management s Report Hong Kong Transport Operations Customer satisfaction as recorded by our regular surveys remained high during The Service Quality Index for Domestic and Cross-boundary services and for the Airport Express stayed at 74 and 84 respectively, being the same as those for The Fare Index, which measures the level of customer satisfaction with fares, changed to 63 from 64 for the Domestic and Cross-boundary services over the past year and stayed at 70 for the Airport Express. Operating Costs Per Car-km Operated For Hong Kong Transport Operations The increase in operating costs per car-km reflected the increase in expenditure on enhancing our service and system. (HK$) Service Enhancements In response to listening to our travelling public, we launched our HK$1 billion Listening Responding programme in March 2012 and identified enhancement opportunities in our network. Over the course of the year, we increased train frequencies significantly, adding over 1,200 train trips per week to our network, providing capacity for 3 million extra passenger journeys each week. These train trips were added to six of our lines, namely the Tung Chung, Kwun Tong, Tsuen Wan, Island, Tseung Kwan O and West Rail lines. During December 2012, we also provided an extra 1,500 train trips on weekends and for the Winter Solstice to make it even more convenient for passengers to get around over the Christmas period. To support such service enhancements, the ten new trains previously committed were brought into passenger service under the Listening Responding programme during the year as planned. To attract more passengers to use the Airport Express, starting from January 2012, train service headway was enhanced from 12 to ten minutes between the start of traffic and midnight by adding 245 train trips per week. While more trains were operated in 2012, the number of delays of five minutes or more reduced by 23% due to improvements Staff Efficiency and Cost Efficiency New initiatives continue to be introduced to enhance operating efficiency. MTR performance vs. Best Performance Staff efficiency (number of passengers per staff hour) Cost efficiency (revenue per total cost) Best Performance = in preventive maintenance and faster recovery when delays did occur. Even more tellingly, delays related to equipment fault were down by 31% from what were already world class standards. In a survey of customers we conducted in November 2012, up to 80% of interviewees found our trains and platforms less crowded while up to 90% were satisfied with the waiting time for trains. Also by the year end, 29 refurbished and modernised Phase I Light Rail vehicles had re-entered passenger service, offering a fresher look and a more comfortable travelling environment. Other enhancements to trains have included installation of LED lighting and noise attenuation technology respectively to save energy and respond to public concerns on saloon noise levels. To improve bus feeder services in 2012, we put into service 18 new double-decker buses with Euro V engines that meet the latest stringent environmental standards. Six more new buses were purchased and will be delivered in To deliver useful travel information to passengers directly, effectively, and in real time, we launched new and enhanced mobile apps during The new MTR Traffic News App launched in September 2012 provides instant updates on train service arrangements during typhoons, festive holidays and serious train service disruptions. The Next Train App, which became available in June 2012, provides real time train schedules for the next four trains on the Airport Express and Tung Chung Line. MTR Tourist App assists passengers to plan their leisure trips in Hong Kong. All mobile apps were migrated to a single portal, MTR Mobile 5.0, allowing them to be seen at one glance and downloaded more conveniently. In collaboration with the Hong Kong Computer Society, the MTR App Talent Quest conducted its award ceremony in October The HK$100,000 Grand Prize was won by a role 34 MTR Corporation
10 play game promoting good passenger behaviour. Improving accessibility to our trains and stations remains a key task for the Company. To accommodate passengers in need better, most of our trains on the Island, Tseung Kwan O, Kwun Tong and Tsuen Wan lines have been modified to allow an enlarged multi-purpose space. The installation of priority seats was completed on the Island, Tseung Kwan O, Kwun Tong and Tsuen Wan lines, while those for the East Rail, Ma On Shan, West Rail, Tung Chung lines and Light Rail are in progress. Under our Listening Responding programme, we have committed to ensuring that all of our full-time stations will have more barrier-free access, and as a result, we aim to provide external lifts, connecting the station concourses to the street level, at ten stations by During the year, new passenger lifts were completed at Jordan, Cheung Sha Wan, Sham Shui Po and Sheung Wan stations. In addition, a total of 52 additional wide gates have been ordered for service by The programme to add 231 more seats at 50 stations was completed on schedule in 2012, while ramps for the disabled came into service at Quarry Bay and Lok Fu stations. We also aim to provide public toilet facilities in ten interchange stations by 2020 under our Listening Responding programme. During the year, toilet facilities were installed at Sheung Wan Station. Detailed designs for Mong Kok and Prince Edward stations are in progress, together with a preliminary design for Admiralty Station. Convenient and modern new entrances were completed during the year at University, Tseung Kwan O and Causeway Bay stations, while the installation of automatic platform gates at aboveground stations on the Kwun Tong, Tsuen Wan and Island lines has been completed. Safety on the Network Safety is an absolute pre-requisite for our transport operations. We remain the safest mode of public transport in Hong Kong. We also continue to be ranked among the best operators for safety performance in international benchmarking. In October and November 2012, staff from our Hong Kong transport operations participated in joint peer review exercises with their counterparts from the Company's railway franchises outside of Hong Kong. The purpose of these reviews is to continuously enhance our safety management through sharing, learning and adopting relevant best practices. Safety training and attachments to Hong Kong transport operations were arranged for safety staff from our subsidiaries. We also supported the safety assessment of new railway franchises outside of Hong Kong. Extensive maintenance programmes ensure continued efficiency and reliability Annual Report
11 Executive Management s Report Hong Kong Transport Operations Light Rail is a vital transport network for the North-West New Territories Initiatives to educate the public on safety included escalator safety campaigns, with prominent safety messages printed on the walls and handrails of selected escalators, deployment of Escalator Safety Ambassadors and repainting of green footmarks on 45 escalators. A safety programme targeting the elderly was also launched jointly with a local radio station in November On the Light Rail service, safety belts and backing plates for wheelchair Safety is an absolute pre-requisite for our transport operations. We remain the safest mode of public transport in Hong Kong. users were installed in 118 vehicles, 999 platform gap fillers were installed at Light Rail stops and a Light Rail Road User Safety Campaign was launched. We continue to promote workplace safety for our staff and contractors staff. A comprehensive 12-month programme was held, aiming at reducing incidents including the use of human factor techniques. A Double Safety Walk campaign saw senior managers and supervisors participate in more safety inspections and discussions with frontline staff. In December, a new mobile app for hazards and near-misses reporting was launched. Our staff and contractor staff safety efforts were recognised through various schemes including the new annual Railway Safety OSCAR Awards. In January 2013, the Company announced its new four-year Corporate Safety Strategy, with the aspirations of being amongst the very best in safety performance globally in all of our businesses and the safest mode of public transport in every place where we operate. This strategy fosters a safety-first culture, drives continuous improvement and engages stakeholders to meet future challenges, with strategic safety priorities and relevant actions established to achieve sustained domestic and international growth. 36 MTR Corporation
12 System and Market Information Railway operation data Total route length (km) Number of rail cars 2,050 1,965 Number of stations (Island Line, Tsuen Wan Line, Kwun Tong Line, Tseung Kwan O Line, Tung Chung Line, Disneyland Resort Line, West Rail Line, Airport Express, East Rail Line and Ma On Shan Line) Number of Light Rail stops Number of e-instant Bonus machines in stations Number of station kiosks and mini-banks in stations 1,331 1,294 Number of advertising points in stations 21,081 21,064 Number of advertising points in trains 23,570 23,669 Daily hours of operation Island Line, Tsuen Wan Line, Kwun Tong Line, Tseung Kwan O Line, Tung Chung Line, Disneyland Resort Line, West Rail Line, Airport Express and Light Rail East Rail Line and Ma On Shan Line Minimum train headway (second) Morning Peak Evening Peak Morning Peak Evening Peak Tsuen Wan Line Kwun Tong Line Island Line East Rail Line Hung Hom to Sheung Shui Hung Hom to Lo Wu Hung Hom to Lok Ma Chau Ma On Shan Line Tseung Kwan O Line Tung Chung Line Hong Kong to Tung Chung Hong Kong to Tsing Yi Airport Express West Rail Line Disneyland Resort Line Light Rail International Performance Comparisons: the 14-member Community of s (CoMET) system network data (2011) MTR * A B C D E F G H I J K L M Passenger journeys (million) 1,470 1, ,183 1, ,389 1,667 1, , Car kilometres (million) Route length (km) Number of stations * The Lines included in the CoMET metro benchmarking programme are Kwun Tong Line, Tsuen Wan Line, Island Line, Tung Chung Line, Tseung Kwan O Line, Disneyland Resort Line, East Rail Line, Ma On Shan Line and West Rail Line. The Airport Express is excluded from the benchmarking. Note: The other metros in the comparison are London Underground Limited, New York City Transit, Sistema de Transporte Colectivo, Régie Autonome des Transports Parisiens, Régie Autonome des Transports Parisiens Réseau Express Régional, politano de São Paulo, Moscow, de Madrid, de Santiago, Shanghai Operation Corporation, Beijing Mass Transit Railway Operation Corporation, Taipei Rapid Transit Corporation and Guangzhou Corporation. The benchmarking agreement prohibits specifically identifying the data by metro system. Annual Report
13 Executive Management s Report Hong Kong Transport Operations Operations Performance in 2012 Service performance item Train service delivery Performance Requirement Customer Service Pledge Target Actual Performance Tung Chung Line, Disneyland Resort Line and Airport Express 98.5% 99.5% 99.9% East Rail Line (including Ma On Shan Line) 98.5% 99.5% 99.9% West Rail Line 98.5% 99.5% 99.9% Light Rail 98.5% 99.5% 99.9% Passenger journeys on-time Tung Chung Line and Disneyland Resort Line 98.5% 99.5% 99.9% Airport Express 98.5% 99.0% 99.9% East Rail Line (including Ma On Shan Line) 98.5% 99.0% 99.9% West Rail Line 98.5% 99.0% 99.9% Train punctuality Tung Chung Line and Disneyland Resort Line 98.0% 99.0% 99.8% Airport Express 98.0% 99.0% 99.9% East Rail Line (including Ma On Shan Line) 98.0% 99.0% 99.9% West Rail Line 98.0% 99.0% 99.9% Light Rail 98.0% 99.0% 99.9% Train reliability: train car-km per train failure causing delays 5 minutes Tung Chung Line, Disneyland Resort Line and Airport Express N/A 500,000 4,203,807 East Rail Line (including Ma On Shan Line) and West Rail Line N/A 500,000 7,113,301 Ticket reliability: magnetic ticket transactions per ticket failure Tung Chung Line, Disneyland Resort Line, Airport Express, East Rail Line (including Ma On Shan Line) and West Rail Line N/A 8,000 18,784 Add value machine reliability Tung Chung Line, Disneyland Resort Line and Airport Express 98.0% 99.0% 99.5% East Rail Line (including Ma On Shan Line) 98.0% 99.0% 99.9% West Rail Line 98.0% 99.0% 99.7% Light Rail N/A 99.0% 99.6% Ticket machine reliability Tung Chung Line, Disneyland Resort Line and Airport Express 97.0% 99.0% 99.5% East Rail Line (including Ma On Shan Line) 97.0% 99.0% 99.6% West Rail Line 97.0% 99.0% 99.5% Light Rail N/A 99.0% 99.9% 38 MTR Corporation
14 Operations Performance in 2012 (continued) Service performance item Ticket gate reliability Performance Requirement Customer Service Pledge Target Actual Performance Tung Chung Line, Disneyland Resort Line and Airport Express 97.0% 99.0% 99.8% East Rail Line (including Ma On Shan Line) 97.0% 99.0% 99.9% West Rail Line 97.0% 99.0% 99.9% Light Rail platform Octopus processor reliability N/A 99.0% 99.9% Escalator reliability Tung Chung Line, Disneyland Resort Line and Airport Express 98.0% 99.0% 99.9% East Rail Line (including Ma On Shan Line) 98.0% 99.0% 99.9% West Rail Line 98.0% 99.0% 99.9% Passenger lift reliability Tung Chung Line, Disneyland Resort Line and Airport Express 98.5% 99.5% 99.8% East Rail Line (including Ma On Shan Line) 98.5% 99.5% 99.9% West Rail Line 98.5% 99.5% 99.9% Temperature and ventilation Trains, except Light Rail: to maintain a cool, pleasant and comfortable train environment generally at or below 26 C N/A 97.0% 99.9% Light Rail: on-train air-conditioning failures per month N/A <3 0 Stations: to maintain a cool, pleasant and comfortable environment generally at or below 27 C for platforms and 29 C for station concourses, except on very hot days N/A 90.0% 99.9% Cleanliness Train compartment: cleaned daily N/A 98.5% 99.9% Train exterior: washed every 2 days (on average) N/A 99.0% 100.0% Northwest Transit Service Area Bus Service Service Delivery N/A 99.0% 99.8% Cleanliness: washed daily N/A 99.0% 100.0% Passenger enquiry response time within 6 working days N/A 99.0% 100.0% Annual Report
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