England’s £2 cap on bus fares will be extended by three months, the Department for Transport (DfT) has announced.
The promotion – launched at the start of the year – was due to expire at the end of March but will now run until June 30.
Prime Minister Rishi Sunak said he wants bus travel to be “affordable for all”.
The current deal runs until March 31 but operators were keen for a new agreement to be secured before the end of Friday as they are required to give six weeks’ notice about plans to cancel services or change routes.
The Confederation of Passenger Transport, which represents bus companies, warned earlier this week that up to 15% of England’s bus services could be lost if Government funding was axed.
DfT figures show “ridership” on buses in Britain outside London was 19% below pre-coronavirus levels on Monday.
It is hoped the extension of the fares cap will boost passenger numbers, and help people travelling for education, work and medical appointments amid the cost-of-living crisis.
More than 130 operators outside London are charging no more than £2 for a single ticket.
Single fares for a three-mile journey outside London normally cost an average of about £2.80 but tickets can exceed £5 for long journeys in rural areas, according to the DfT.
Up to £80 million of Government funding will be used to protect services, while the extension of the fares cap is backed by up to £75 million.
Mr Sunak said: “I want to make bus travel affordable for all, that’s why we’re continuing to cap fares at £2 and protecting local routes, ensuring we have a modern and efficient network that’s accessible for everyone.
“Getting more people onto reliable and affordable buses will strengthen communities and help grow the economy, connecting people to jobs, driving pensioners to see friends and family, and helping people attend medical appointments or access education.
“I’m determined to ensure that no matter where you live, you have the same opportunities to get around easily and can feel pride in your local area which is why protecting our local bus services is so important.”
Transport Secretary Mark Harper said: “Travelling by bus remains the most popular option for commuters and families across the country, but the sector is still trying to recover after the end of the pandemic.
“We’re providing £155 million to help passengers save money on fares, get more people on the bus and protect vital bus routes – helping with the cost of living and enabling people to get where they need to in an affordable and convenient way.”
CPT chief executive Graham Vidler said: “We welcome the Government’s extension of the Bus Recovery Grant, which will help protect vital passenger services for a further three months.
“It is now critical all parties use this three-month extension to move away from short-term funding fixes, and instead build a sustainable settlement to unlock the economic, net zero and social well being potential of buses.
“The Government’s continuation of the £2 fare cap is also a good move to help make buses more attractive during a cost-of-living crisis and we will work with our members to understand how they can maintain this initiative.”