From next month, highway bus fares will rise an average of 9%. As a result, fares on some premium highway bus routes will become more expensive than KTX. If this price reversal accelerates the bus industry's financial woes, it could lead to cuts in routes that do not generate revenue. Concerns are also growing over "transportation polarization," which President Lee Jae-myung noted at a Cabinet meeting on the 1st of last month.
◇ Premium highway buses such as Seoul–Busan to become more expensive than KTX
According to the Ministry of Land, Infrastructure and Transport, the ceiling on highway bus fares will be raised 9% starting on the 1st of next month. The fare hike comes at the request of the bus industry and is the first in three years since 2023 (5%).
Meanwhile, KTX, classified as an alternative mode of transport to highway buses, cut fares by an average of 10% starting last month. Korea Railroad Corporation (KORAIL) decided to lower KTX fares to the level of SRT as it merges with SR, the SRT operator. This fare structure will remain in place for at least three years. The Korea Fair Trade Commission attached a condition to its approval of the business combination of KORAIL and SR to "maintain the fare cuts for three years."
As a result, a price reversal is expected in some sections where highway buses become more expensive than KTX. For example, the premium highway bus fare for Seoul–Busan will rise from 51,600 won to 56,200 won. That becomes more expensive than the KTX fare for the same section (53,800 won). Until the fare change, KTX was more expensive at 59,800 won.
The premium highway bus fare for Seoul–Daejeon will also rise from 21,500 won to 23,400 won, becoming more expensive than KTX (21,600 won). Seoul–Mokpo will increase from 46,800 won to 51,000 won, also becoming more expensive than KTX (47,500 won).
◇ Bus industry's management woes deepen… overseas, bus fares are one-third to one-half of trains
There are concerns that this price reversal will deepen the bus industry's financial difficulties. Buses take longer than KTX but have the advantage of lower fares. In major countries such as the United States, the United Kingdom, and Japan, train fares are about two to three times more expensive than buses.
But in Korea, KTX fares are only about 10% more expensive than premium highway buses. As a result, the average daily number of intercity bus users fell by half from 540,000 in 2019 to 270,000 last year, and highway buses also decreased by about 30% from 83,000 to 58,000.
According to the Korea Bus Transport Business Association Federation, highway bus operators recorded a deficit of about 102.9 billion won in 2024, or 20.1% of sales of 511.5 billion won. Intercity buses also posted a deficit of 178.5 billion won, with a deficit ratio of 17% against sales of 1.0503 trillion won.
◇ "If passengers decline, we will cut unprofitable routes first"… Lee orders "measures against transportation polarization"
The problem is that route cuts can lead to transportation polarization. Intercity bus routes have already decreased from 3,335 in 2019 to 3,177 last year, and highway buses from 208 to 164.
Kim Sun-kyung, managing director of the Korea Bus Transport Business Association, said, "When we cut routes or reduce the number of runs, we have no choice but to cut routes that do not generate revenue first," and added, "If buses disappear in rural or fishing villages where there is no rail and only occasional buses, residents will be harmed."
President Lee Jae-myung also said at a Cabinet meeting on the 1st of last month, "People in areas with high-speed rail stations will use it comfortably, cheaply and quickly, but other areas have to take intercity and highway buses," adding, "This also causes a kind of transportation polarization, so what are the measures?"
An official at the Ministry of Land, Infrastructure and Transport (MOLIT) said, "As this is a complex issue that requires us to take into account transportation polarization and KORAIL's financial burden while also comprehensively considering prices and public convenience, we will work to find solutions."