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Hong Kong Subway Has $2 Billion Annual Profit and Here’s Why

Remember the time when you used to find trains interesting? When subways and everything related to heavy carts rolling on steel tracks would turn your imagination wild? Maybe you don’t. But if there’s one thing we find as interesting as the tremendous automotive world, then it has to be everything connected to railways. And Hong Kong is not just a city with extreme population density, it’s also the home of incredible transportation.
Hong Kong subway 1 photo
CNN Money claims Hong Kong’s subway turns a $2 billion annual profit, and we have to admit that got our attention. But how much is this sum, after all?

Well, think of this little calculation: while the European Union has a $18,526 billion Gross Domestic Product, according to data from the International Monetary Fund (2014), China is placed second with $17,617 billion, just in front of the US which is positioned third at $17,418 billion.

Think of it this way, the annual profit of Hong Kong’s subway company is the same with the GDP of San Marino, an enclaved microstate surrounded by Italy, situated on the Italian Peninsula.

According to the source, 5.2 million people travel by subway every day while the fares alone cover around 175 percent of the operating costs.

The Hong Kong underground transport system is run by a publicly traded business called the Mass Transit Railway Corporation. The government is the majority stakeholder, which means it’s a state-run company. Run by the state, but working like a top-notch private giant, with a 99,9% on-time ratio.

Even though a lot of cash comes out of the fairs travelers pay each trip (which is quite cheap in comparison to Western countries, of course - $0.50 to $3), the huge profits come out of a lesser-known side of the business that is property development. Apparently, approximately 50 major properties across Hong Kong are owned, developed or managed by MTR, including two of the city’s tallest skyscrapers.


 
 
 
 
 

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