Hike in Athens transport fares of no help to operating companies

Four months after value-added tax on public transport was hiked from 13 to 23 percent, the price of a single-journey ticket in Athens is set to rise from 1.20 to 1.40 euros as of January 1 (and from 60 to 70 cents for reduced-price tickets).

Public transport companies had to absorb the hike from September to December, which sources say amounted to a monthly burden of 2 million euros, as the Infrastructure and Transport Ministry was late in implementing the Finance Ministry’s decision, with a major impact on the companies’ finances.

Ticket prices had been reduced from 1.40 to 1.20 euros in September 2014 by then transport minister Michalis Chrysochoidis in a bid to boost passenger traffic. Nevertheless the ministry’s neglect as regards ticket inspections, especially on buses, has seen the number of fare dodgers soar, entailing significant revenue losses for the public transport firms.

Along with the price hike, the duration of each ticket’s validity will also be extended from 70 to 90 minutes, as was the case before September 2014. Monthly travelcards will continue to cost 30 euros (15 euros for reduced-price ticket users).

The rise in fares will not boost the coffers of the public transport companies – it may even harm them due to possible drop in users or a rise in fare dodging – as the additional revenues will go directly toward supporting the budget via the VAT system. This means that, despite the fact that their ability to branch out into other areas is extremely limited, the transport companies will have to continue searching for more revenues to plug their own budget holes.

Furthermore, the firms will have to cope with the 14-million-euro reduction in state funding, and that on the back of a previous cut of 58 million in 2014. As things stand, if the requests for extraordinary funding of 29 million euros for OSY (buses and trolleys) and 11 million euros for STASY (metro and tram) are turned down, their operations will be put at risk.

Notably public transport companies also had to absorb the impact of the government’s decision to allow people to travel on public transport for free in the first couple of weeks of the capital controls, from June 29 to July 12. This period cost the Athens Public Transport Organization (OASA) an estimated 9.5 million euros.

Eventually the free transport decision was extended to services to Athens Airport, too, even though that had not been the decision of the competent authorities and they are mainly used by tourists who were far less affected by the bank shutdown and capital controls.