BC Ferries losing money

[logicalview]

Funnily enough it was set up to serve the public after job action at the Black Ball Line and the CPR.

And now it's a hostage to the same ilk.

BC taxpayers subsidized the $26 and hour burger flippers with $151 million in fiscal 2011.

[Thinktank]

they could start by not paying the top ten 'parasites' at BC Ferries $hundreds
of thousands of dollars per year EACH.




.

[Al Czervic]

I do think the BC Liberals deserve blame for what has happened at BC ferries. From my perspective, the whole problem comes back to David Hahn and his turning BC Ferries into a cruise ship fleet instead of basic transportation. Yes, “the fill’s” look nice but seriously do we need a special “private fee for entry lounge ” on a ferry ? Not to mention the new built in Germany BC ferries seem to be sitting on standby more often than not – why is that exactly ?

BC ferries need to clean house in management and bring in someone who has a mandate to create a discount ferry fleet – not unlike what Westjet did with airlines – eliminate poorly used runs, get rid of costly frills, offer a full car load discount….why is it we have HOV lanes but no incentive to load the ferries full of people? How about pay bonuses based on how full the ferries occupancy rates are subtracted by any finical loses for the company. And please, get rid of the expensive advertising at Vancouver Canucks Games….you are a monopoly and do not need to engage in expensive advertising.

If you ever ride a ferry in Washington State the BC Ferries fleet is like the Taj Mahal in comparison and that needs to change.

[Thinktank]

Just give BC Ferries to Westjet, and let them fire the top guys
and manage it properly.



.

[NAB]

Not to mention the new built in Germany BC ferries seem to be sitting on standby more often than not – why is that exactly ?

I generally agree with your post Al, but where did you get the above idea? Crazy thing is, while those owelimpics friendly super ferries can carry far far more vehicles and passengers than the old double enders do (and which they rarely filled to capacity either), they didn't seem to reduce the number of sailings accordingly. It's like running a 70 passenger transit bus around town carrying the average number of passengers per trip that could be handled more efficiently and at far less cost in a Chrysler Minivan.

Nab

[sooperphreek]

there should be no way they are losing money. 4 people and a car is 100 bucks. and a reservation is 17.50. and then the overpriced food and beverages in the restaurant.

[Smurf]

Smurf wrote:
As a total aside and I believe it has been brought up before. Do the ferry routes not deserve as much subsidy as our roads. Why does Kelowna get a new bridge? Why not just close it down and go around. Should every road in the Province be a
private toll road. I always have this in the back of my mind. Should people be punished for living on an island anymore that someone who wants to live up north. I do not like the money put into the ferry system anymore than the next person but is it part of our highway system.

"up north" is a pretty big area. Does every tiny end-of-the-road hamlet have a paved road into it? No, obviously. So we already do draw the line somewhere. By the same token, not all inhabited islands merit multiple sailings per day. Kelowna gets a new bridge because it's used by thousands of people a day and isn't a bridge to nowhere.

Reach a little further back in your mind for some perspective on what routes should be maintained and which could be cut back, and don't lean too heavily on a road analogy that is not entirely appropriate.

Maybe read what I said Homeowner. Did I say anything about paved roads or did I say "as much subsidy". In other words do they deserve a ferry ? By the same token where did I say anything about multiple sailings or even every day. You are right, many more people use the bridge but does that make some sort of service to an island any less important? I am just asking if there should be service even if it is only weekly. I was trying to ask the question should these routes be considered a part of our road system and therefore deserve some sort of subsidy. No where did I say anything about how much or that they should have multiple service every day.

I believe the first step is to decide for sure if they are part of our highway system and if they deserve subsidy. Then we can decide what type of service is warranted. We have to remember that these people pay the same provincial taxes we do an probably desrve at least some service the same as the majority of us get roads. Just asking.

I do not really know the circumstances on the islands. I presume the docks etc are smaller and do not take the large boats. Would cutting back the service too far present a problem where you couldn't get enough capacity if you only went a couple of times a week. I have no idea. Would the cost of increasing the dock size etc, be prohibative? Just asking.

[NAB]

For info many if not most of the crossings from the main island to sparsely populated small islands are small single open deck boats with no on board passenger services at all, and with docks sized to match and in places where larger boats couldn't even get close to. In fact, in some cases they don't even take vehicle traffic, just pedestrian traffic. A typical crossing time might be in the order of 15 minutes or less, and you don't even bother to get out of your vehicle. And of course there are situations where an island has no government ferry service at all.

Edit to add: Don't forget though, the ferry service isn't just about Vancouver Island plus smaller Islands reached via the main Island. It services Islands and coastal communities on the mainland coast too, such as Langdale and the Sechelt, and Bowen, Gambier, and Keats Islands (out of Horseshoe Bay). And one route that gets very little recognition or attention is the route between Comox on the Island and Powell River on the mainland.

Edit to add: Powell River can be reached in two ways, the Comox Vancouver Island route and the Horseshoe Bay - Langdale and Earl's Cove - Saltery Bay crossings on the mainland.

Nab

[Smurf]

Thanks. That is kind of what I figured. So should we consider at least some sort of service as necessary or not? Where do we draw the line. Are the islands private or public? We build roads, hydro lines etc. for business, should we be supplying at least minimal service for islands? Where do we draw the line?

[NAB]

Mostly public. Edit: As for providing "minimal service" - I don't have a problem with that, it's just that with so many of these crossings defining "minimal service" is a bit of a connundrum. It becomes even more complex if access to services like hospitals/health care, doctors, shopping, even schools are non-existant. Each Island has to be independantly evaluated as to its level of service need based on its individual demographic I would think. A lot of those folk get around by private watercraft anyway, much the way the rest of us get around by personal vehicle or taxi.

Nab

[Homeownertoo]

Maybe read what I said Homeowner. Did I say anything about paved roads or did I say "as much subsidy". In other words do they deserve a ferry ? By the same token where did I say anything about multiple sailings or even every day. You are right, many more people use the bridge but does that make some sort of service to an island any less important? I am just asking if there should be service even if it is only weekly. I was trying to ask the question should these routes be considered a part of our road system and therefore deserve some sort of subsidy. No where did I say anything about how much or that they should have multiple service every day.

I believe the first step is to decide for sure if they are part of our highway system and if they deserve subsidy. Then we can decide what type of service is warranted. We have to remember that these people pay the same provincial taxes we do an probably desrve at least some service the same as the majority of us get roads. Just asking.

I do not really know the circumstances on the islands. I presume the docks etc are smaller and do not take the large boats. Would cutting back the service too far present a problem where you couldn't get enough capacity if you only went a couple of times a week. I have no idea. Would the cost of increasing the dock size etc, be prohibative? Just asking.

You were doing much more than merely asking the question whether they deserve some sort of subsidy. Specifically, you made the point "Do the ferry routes not deserve as much subsidy as our roads", without offering any supporting argument, and followed that with "Why does Kelowna get a new bridge? Why not just close it down and go around." A rather strong point of view at that, I suggest. So I read what you said and responded. Fairly. But you missed the point I was making, which is that the issue is not whether these thinly inhabited islands deserve ferry service but what level of service is appropriate. Should it be daily, weekly, or multiple times a day? And are they currently under-serviced or over-serviced.

[NAB]

And of course are the residents prepared to pay the price for whatever level of service they "demand"? (over and above whatever is established as a "minimal" per capita for example). In most cases they are not IMO, but want the convenience of being overserviced at someone elses expense anyway.

And I continually shake my head at how "they" can justify that Mill Bay - Brentwood Bay service. Sure it shortens the route from Swartz Bay to up Island, or to Swartze Bay for some Victoria Area residents, but for those heading up Island from the mainland the Duke Point or Departure Bay terminals usually make more sense.

Nab

[logicalview]

And I continually shake my head at how "they" can justify that Mill Bay - Brentwood Bay service.

Nab

Makes one wonder what they did before convenience.

[NAB]

It may just be my imagination, or simply the circles I move in, but it seems to me much of the whining about rate increases on small island hops and opposition to service cuts originates from two islands - Salt Spring and Gabriola. Texada Island of course is accessed from Powell River on the mainland, so has little to do with Main Island - small island links irritations.

Hell, most Islands are lucky if they have one ferry terminal of whatever type, (and certainly no onboard services on them), while Saltspring somehow managed to get three!!! And not only two links to the main Island, but an island hopping route to the mainland via Pender, Mayne, and Galiano to Tsawwassen too! I suspect there are lots of opportunities for service revisions, improved efficiencies, and cuts related to the Southern Gulf Islands (including the Mill Bay - Brentwood Bay "convenience for a few" link), but I suspect a lot of powerful (and comparatively rich) people enjoy living on them, and carry a lot of clout politically with Victoria. yet these are the routes that generally lose money and require subsidization from both taxpayers and passengers on the main routes.

Nab

[NAB]

""The future of BC Ferries: tough decisions needed to stay financially afloat

First in a series: Quasi-private corporation grapples with how to shore up a service that is sinking in a sea of red ink, with fares already at ‘tipping point’


In August the sun shone and people started travelling again. After a dismal spring, BC Ferries was able to announce that its ships carried about three-per-cent more traffic for the first few weeks of the month compared with the year before.

But a good month doesn’t make a trend, and for the past couple of years, the trend line has been pointing to trouble for a ferry service that was remade about a decade ago in a way that was supposed to keep it off the financial rocks it is now heading toward.

In mid-June, the quasi-private corporation reported that for the last fiscal year it lost $16.5 million, with foot passengers at a 21-year low and vehicle traffic at a 13-year low.

For ferry watchers, the details of the bad news merely confirmed what BC Ferries Commissioner Gordon Macatee reported in January — that the ferry service remade by the Liberal government nine years earlier to take the politics out of what should be business decisions was in need of another renovation. This time, however, the tough decisions needed to keep the ferries financially afloat will be back in the hands of politicians, because of the effect they will have on life in island communities.

Macatee says fares are already at a tipping point beyond which many users can’t afford to go. Even higher losses could result from raising fares more to cover rising costs and revenues lost because of falling ridership.

By November, the B.C. government expects to have a report from a consultant hired to poll ferry users for their views on how to bail out the ferry service before it sinks in a sea of red ink.

Before he was replaced as transportation minister in a cabinet shuffle, Blair Lekstrom said in an interview that changes will be required.

“If we need to actually find a way to have an affordable, sustainable system, and affordable is the key word I hear, then we’re going to have to look at some changes,” said Lekstrom, who is not running in the May provincial election.

“Don’t come out and tell us that you just want the service to stay the same, because that’s a non-starter.”

Changes won’t come easy, however, for a ferry system that has served and shaped British Columbia’s coast since being launched by a premier who decided the provincial capital in Victoria couldn’t be held hostage to a strike by a private company.The Dogwood Fleet launched by W.A.C. Bennett in 1958 has grown into one of the largest ferry services in the world, with 35 ships plying 25 routes. Up and down the coast, people have planned their lives around the expectation that the service we have today will be there tomorrow.

As the fleet aged, debts mounted with the high cost of replacement ships in the 1990s, which saw the addition of the Superferries and the ill-conceived fast ferries.

When the Liberals took over from the NDP in 2001, Premier Gordon Campbell declared the publicly owned and operated BC Ferries system broken, with its ongoing losses and no affordable plan for renewing the aging fleet.

The fix, the government decided, was a new corporate structure that allowed BC Ferries to be managed as though it was a private corporation even though it was publicly owned, with the provincial government as the sole shareholder.


So in a symbolic break with the past, the once-proud Dogwood flag was retired, replaced by a vaguely modernist ensign representing the all-new B.C. Ferry Services Inc. A president and CEO was hired from the private sector and given a relatively free hand to run the company. In his new role, David Hahn plowed straight into controversy with a messy fight with the union and a decision to break tradition and go offshore to buy new ferries.

Labour relations slowly improved, however, and the three Coastal-class vessels ordered from Germany proved their worth in daily service.

The biggest controversy left after seven years turned out to be the relatively large pay packet Hahn and other top executives at the corporation were taking home. In the face of public outrage over his million-dollar salary, the province amended the Coastal Ferry Act so that henceforth — even though the corporation was intended to mirror a private-sector company — the top executive salaries would not be so far out of line from the public sector.

By most traditional measures, the new company was a success. New ships were in service, their on-time record was improving and customer satisfaction was on the rise.

In his January review, Macatee found that in comparison with other large ferry systems around the world, BC Ferries is “relatively efficient.”

“Indeed, many ferry operators appear to want to emulate some of BC Ferries practices.”

So the car was running great. Unfortunately, it was still headed off the road. That’s because while B.C. Ferry Services Inc. is the engine that pulls it along, the government is still in the driver’s seat, despite its efforts to depoliticize ferries.

“Our job is to run the business as efficiently and as safely as we can. The government’s job is to set the service level and the service fees,” says Mike Corrigan, who took over as CEO after Hahn retired last year.

The province sets the direction through a services contract that was put in place when BC Ferries was reconfigured to assure ferry-dependent British Columbians that the new quasi-private corporation would not enhance its bottom line by simply cutting service on money-losing routes.

In return for insisting the service be maintained, the province provides an annual subsidy in the form of a service fee, which was $128.3 million in the last fiscal year. Provincial and federal subsidies added another $27.5 million to BC Ferries revenues, which totalled $738.2 million last year.

So the company delivering the ferry service was reformed but the service it delivered was frozen in time. That hasn’t worked out so well.

Over the decade, fares had been increasing to cover the costs of servicing the debt for new ships and the soaring price of fuel. On some routes, the increase was more than 100 per cent.

Then ridership stagnated and started to fall. Fewer passengers means less revenue without resulting in lower costs. To bridge the gap, fares have to be raised again, since the service levels provided by BC Ferries are mandated by the contract between the company and the government.


The result is that ferry users complain they are paying too much while the operators have to service routes that — from a financial point of view — make no sense.

The only routes that break even are the majors that run between Vancouver Island and the mainland. The biggest money losers are in the north, which get more than $50 million — almost a third of the total annual subsidy — for just three routes.

Almost all of the other minor routes also lose money to a varying degree and are kept afloat with the service fee.

But even with the bump of $80 million over four years that was announced in the spring, there isn’t enough money coming in to continue to run the system the way it has been. The situation is even more dire when the need to replace more ships over the coming years is factored in.

And there are no easy options for closing that gap.

“Either the fares have to go up or the service fees have to go up or the level of service has to go down,” says Corrigan.The government blunted the impact of another fare increase slated for this spring with the injection of new money. But everyone knows it’s only a stopgap measure. And what the consultant will quickly find is the solution to the problem ferry users have in mind is the polar opposite of what the government says is possible.

Ferry users blame the decline in ridership primarily on the increase in fares. Raising them again will just drive more people away while further disrupting life in island communities. In his report, Macatee agreed, arguing fares were at a “tipping point” and that future increases needed to be kept to the rate of inflation. Raising them more to cover rising costs and revenues lost because of falling ridership may lead to even higher losses.

That conclusion was drawn almost a year ago, before the latest increases, says Bill Cripps of Powell River, the chairman of the Ferry Advisory Committee for the north Sunshine Coast. “Now a full year later we’re at the tipping point plus four-per-cent more, which was added in April of this year.”

Cripps says the only way to increase ridership is to reduce fares by 25 per cent, rather than increasing them further.

“The commissioner was dead right and there is no easy way out of it other than an increase in subsidy that nobody really wants to talk about,” he says.

Lekstrom is happy to talk about an increase. But what he has to say is not what ferry users want to hear.

“Is more money in the cards right now? No, it isn’t.”

That sets the stage for what is most likely going to be a rough ride this fall for a consultant with some tough decisions at the end that are bound to have a significant impact on the lives of people who depend on ferries for their access to the outside world.""


http://www.vancouversun.com/news/future ... story.html