Many lawmakers on Friday voiced support for a fare increase application by Hong Kong Tramways, saying it would help the tram operator ride out its financial hardship.

If approved, the first hike since July 2018 will see adult fares climb from HK$2.6 to HK$3, fares for those under 12 rise from HK$1.3 to HK$1.5 and fares for elderly people go up from HK$1.2 to HK$1.3 per ride.

At a Legco panel meeting, the company's managing director Cyril Aubin said if the proposal is to be rejected, the firm would plunge further into the red.

Hong Kong Tramways reported a net loss of HK$3 million last year.

Aubin said the proposed fare hike would generate an additional HK$13 million to HK$14 million in revenue each year.

Despite a drop in passenger numbers in the past few years, he told lawmakers that the tram operator can survive in the long run.

"At HK$3, our low fare positioning in the public transport ecosystem will be unchanged. Still, we will be almost 30 percent cheaper than the cheapest bus," he said.

"Our financial situation is at risk, but not hopeless. We need a bit of time to innovate and find the best business model and keep on optimising our assets."

Lawmakers Chan Siu-hung and Perry Yiu were among them voicing support for the fare increase, saying the tram is more than just a mode of public transport and is popular with locals and tourists alike.

But Roundtable legislator Michael Tien said the proposed 15.4 percent increase in adult and children fares was too high, and should be halved to about 7.6 percent, taking the inflation rate over the past four years into consideration.

The views of Legco's Panel on Transport and the Transport Advisory Committee will be taken onboard by the administration before it submits its recommendation on tram fares to the Executive Council for approval.