Express buses face uncertain future as rising fares, KTX competition shrink ridership

Express bus fares in Korea rose by 9 percent at the beginning of this month. This has led many passengers to ask whether they are still worth the price, since trains can get them to their destination faster for nearly the same fare.

Bus fares are almost on par with KTX high-speed rail tickets following the increase on Oct. 1. The price rise came despite the continuous decline in express bus ridership.

Express buses, which once generated significant revenue in Korea in the 1980s, face the challenge of attracting passengers amid a recent price hike and ongoing competition from the KTX.

The KTX is even a cheaper option than express buses in some cases.

For example, KTX economy seats from Seoul to Busan on Oct. 30 started at 42,700 won ($32), while fares for economy bus seats for the same route cost 43,000 won.

Passengers might be more inclined to take express buses if they were faster. However, the KTX can reach Busan about an hour and a half earlier, with road traffic sometimes further increasing the time difference.

"I almost missed a wedding because the express bus arrived at the destination an hour and a half later than scheduled," a passenger told the Korea JoongAng Daily on Wednesday on the condition of anonymity. "You can’t predict traffic conditions."

With the express bus industry potentially facing a steeper decline in ridership and further financial strain due to fare increases and the KTX, even the government is worried about its future.

President Lee Jae Myung called for measures to address the decline during a Cabinet meeting on Aug. 25, saying that “trains are faster and relatively cheaper, while express buses and long-distance intercity buses are continuing to disappear.”

Why the price increase

The express bus industry, run by multiple private operators, once thrived.

The industry ranked first in average annual revenue per vehicle, generating about 96 million won per bus in 1983, according to data released by the Economic Planning Board in 1984.

However, a surge of privately owned vehicles nationwide since the 1990s, coupled with the launch of the KTX in 2004, led to a decline in bus ridership.

Before the Covid-19 pandemic began in 2019, express buses still carried more than 32 million passengers annually, but by around 2022, the pandemic had cut ridership by around 30 percent and revenue by more than 20 percent, according to a report by the JoongAng Ilbo.

The industry thus had no choice but to raise fares under mounting financial pressure from declining ridership on top of rising oil prices and driver wages. The Ministry of Land, Infrastructure and Transport also raised the industry's fare cap by 9 percent last month.

“We have given this a great deal of thought, but if the government refuses to approve a fare increase, we may have to cut routes with low passenger demand first,” an official from the Land Ministry was quoted as saying by the JoongAng Ilbo. “Most of these routes serve rural areas where residents have few other transportation options.”

Whether the recent fare hike has led to a decline in overall bus ridership remains unclear as of Wednesday, as relevant data is not yet available.

“We don’t have enough information yet to say for sure whether passenger numbers have changed since the increase,” a spokesperson from express bus operator Chunil Express told the Korea JoongAng Daily on Wednesday.

Discontinued bus routes

Around 30 buses on average are still running on high-demand routes such as Seoul-Busan per day, according to data from the Land Ministry, while less popular routes have faced a different fate.

Operators discontinued 71 express bus routes between 2021 and June this year, according to data shared by ruling Democratic Party Rep. Cho In-cheul. Among the discontinued routes were relatively low-demand services that reportedly struggled to turn a profit, such as eastern Seoul to Hwacheon County, Gangwon, and eastern Seoul to Jeongeup, North Jeolla.

Major Korean bus operators, however, have yet to discontinue any routes following the fare increase.

“We have no plans to discontinue any routes at this time, so there’s nothing further we can say on the matter,” the spokesperson from Chunil Express said. “We also haven’t received any requests to keep specific routes running.”

Operators could stop serving routes to sparsely populated areas as seen in Japan, where population declines and an aging population have reportedly reduced demand for bus services and led to many route cuts, especially in rural areas. The Japanese government has identified both declining demand associated with demographic change and a shortage of drivers as causes of discontinuation.

Some low-demand routes in Korea will still be around regardless of profitability, though, as the government promulgated a law on May 29 — set to take effect on Nov. 30 — mandating a certain number of bus routes to prevent population decline in rural areas.

The new law also stipulates that the “land minister or local government head must work to improve transportation between regions by ordering operators to improve services on these designated routes or providing financial support.”

“Canceling bus routes based solely on profitability will accelerate the population decline of rural regions,” Rep. Cho said. “The government must take steps to maintain public transportation infrastructure, including expanding central government funding and making sure to keep essential bus routes running.”

The National Federation of Bus Transportation Business Associations has also requested the government take measures to help sustain the express bus industry, including expanding stretches of highway covered by dedicated bus lanes and extending the permitted service life of buses.

Why bus over train

The recent fare hike may lead more passengers to prefer the KTX over express buses, but for those living in remote areas far from KTX stations, buses remain a more efficient choice for long travels.

Those living in Sokcho, Gangwon, for example, can travel to southern Seoul in two to three hours via express bus for around 23,000 won.

Traveling to Seoul Station in central Seoul, on the other hand, requires taking a bus to the nearest KTX station in Gangneung, Gangwon, and then boarding a train. The entire journey takes around three hours and costs about 35,000 won.

Express buses also come in handy for those who live near KTX stations but are heading to destinations without train stops.

For those heading from Seoul to government complexes in Sejong, express buses provide a direct route, as the central city doesn’t have a KTX stop. Travelers can reach Sejong via the KTX, but not directly. They must take a KTX train from Seoul Station to Osong Station in North Chungcheong and then transfer to a bus to reach Sejong.

Demand for express buses may thus persist as long as there are areas with limited access to the KTX — for some time.

As Korea is experiencing a nationwide population decline, low-demand bus routes may not survive even with government financial support.

Moreover, while the KTX remains a major competitor to the express bus industry for now, competition could intensify with the emergence of new transportation options, such as self-driving cars, pushing bus operators to improve their services and adapt to a rapidly evolving mobility landscape.

BY PAIK JI-HWAN, KANG KAB-SAENG [[email protected]]