BC Ferries losing money

[logicalview]

The government on the other hand is tying Ferries hands because if ferries did what they should do (cut service and related schedules to reduce costs and fares) it would be politically very unpopular, and we cannot have that with an election on the horizon can we?

Nab

Especially since the Island is a NDP hotbed. Cutting service to them and eliminating union jobs would be too much for them to handle.

On the other hand, if the BC Ferries were a run like a private corporation then the decision to sink the sailings would have been made a very, very long time ago.

[logicalview]

No, that's not what I mean, and Dix has nothing to do with it (besides, in spite of your attempt to derail yet another thread onto a Dix bashing theme

Nab

Dixaster has everything to do with it. He's fixin to Occupy the Premiers seat in a matter of months. I'm certain that the NDP'ers on the Island and those making sandwiches are keen to hear what he's going to offer as a payoff for their support and how he's going to stop the BC Ferry fleet from losing money. In fact, all taxpaying British Columbuians would like to know what he has in store.

[NAB]

On the other hand, if the BC Ferries were a private corporation then the decision to sink the sailings would have been made a very, very long time ago.

Exactly, and runaway fares would not have become an issue as a result (ya, there would be some whining along the way about service reductions to keep fares under control but people would adjust). They would also not have become an issue if they were properly government run as a basic service instead of trying to turn them into an unworkable blend of private for profit and public service interests. It's when the politicians get directly involved for purely political purposes and subsidize and bonus failure that things fall apart.

Nab

[logicalview]

The government on the other hand is tying Ferries hands because if ferries did what they should do (cut service and related schedules to reduce costs and fares) it would be politically very unpopular, and we cannot have that with an election on the horizon can we?

Nab

Haha. Looks like we can!

B.C. Ferries will cut 98 round trips on major routes from October until March as a cost-saving measure - including 32 between Swartz Bay and Tsawwassen.

Read more: http://www.timescolonist.com/news/Ferri ... z24l3lkLQp

But why?

"These [trips] are underutilized," said spokeswoman Deborah Marshall. "They would go out normally more than three-quarters empty."

Wow. 98 round trips. That's a lot of trips! That's going to make a huge impact!

Isn't it?

"We operate 185,000 sailings a year," she said, describing the cuts as minimal. The cuts will apply for the next four years during the low season.

Surely the BC Ferry people didn't come up with this on their own!

"[The provincial government] has given us some targets for cost-cutting measures," Marshall said.

In an election year Nab.

In an election year.

Next thing, Dix will want to Save the Ferries and ramp up a few studies.

It's when the politicians get directly involved for purely political purposes and subsidize and bonus failure that things fall apart.

You betcha.

[Rwede]

"Clearly there's a problem, there's a business problem when fewer and fewer people are able to take the ferries, that's hurting revenue on the one hand and indicating a reduction of service on the one hand, and on the other hand, senior officials still getting bonuses — there's a disconnect there that we'll have to address"

Umm, hurting revenues, sure, but what about the cost side, Dix? What if your costs are higher than your revenues? Lower revenues would therefore save you money, Clown Thong.

Why am I wasting my time on Dix? He will never understand a business model where both revenues AND costs are involved.


ETA: how many hands does he have? I count at least 3 in his spew. I'm sure he'll put them all to good use.

[NAB]

*fix your quotes/Jo*

Nope. If you look at the detail it really mostly amounts to seasonal elimination of a few extra sailings that were put in place to accommodate expected extra traffic that didn't materialize over the summer. Just token fluff cuts IMO. Besides, that involves the long haul runs to and from the mainland, while the real crux of the issue has to do with the little runs between the smaller islands and the main island (the ones actually losing money). No one is touching them until the government does its politicing via "consultations" with the small islands special interest groups involved.

Edit to add: Lessee, there are approximately 25 weeks between October and March low season. 98 round trips works out to approximately 4 round trips a week distributed between 3 routes, or approximately one trip a week on each route. Pshawww, that will not even be missed by anyone, yet they will probably put them back next April and keep runing them at only 25% load.

Nab

[GrooveTunes]

And no union jobs will be lost because of the reduced sailings.

[NAB]

""Liberals' plan for B.C. Ferries hasn't worked


Walter Cordery, The Daily News
Published: Monday, August 27, 2012

I can't think of any other business that punishes its best customers while continuing to subsidize those who cost it millions of dollars.

But that's what B.C. Ferries continues to do.

Rates continue to skyrocket, especially on the two moneymaking routes - Route 1 (Swartz Bay-Tsawwassen) and Route 2 (Departure BayHorseshoe Bay) - and now the corporation will chop 18 round trips between Horseshoe Bay and Departure Bay, and 32 round trips between Tsawwassen and Swartz Bay.

When you've got a winner and are making money, my assumption would be to increase service but not Ferries. Between Oct. 13 and March a total of 98 roundtrip sailings will be chopped between Vancouver Island and Greater Vancouver. Granted 48 of those are on Route 30 (Tsawwassen-Duke Point), which doesn't make money. So that's probably a move in the right direction.

This is all part of the provincial government's edict to cut costs on the major sailings by $1 million.

Fine, I guess. But why isn't the Ferry Corporation chopping runs on all the money-losing routes to the smaller Islands.

Residents of these communities don't like to be told it is the riders who utilize the major routes that subsidize their frequent service.

Like we all do, they howl bluebloody murder when fares are increased but shouldn't they pay the majority of the cost of the service that connects them to whatever major destination they head back and forth to?

Customers on Routes 1 and 2 subsidize those costs.

It's got to stop because fares on the major routes are ridiculously high; so high that car and foot traffic continue to decline. At $160 for a car and two passengers round trip, can it be any wonder more and more people are flying to the mainland?

The corporation released its first quarter results Friday covering the period between March and June, showing net earnings of $3.3 million.

It lost $3.5 million over the same period last year.

Revenues increased 5.7%, but almost half of the extra $10.6 million was due to the hike in fuel surcharges levied as a result of higher gas prices.

About $3.6 million was spent to cover those higher fuel costs.

Car and foot traffic continued the downward trend as Ferries experienced a drop of 1.7% in vehicle traffic and 2.4% in foot traffic.

Frankly, I believe costs continue to rise and services cut because of the governing B.C. Liberals aversion to raising provincial income taxes.

Higher fares and user fees are a lot more politically palatable than boosting taxes.

And let's face it: How often do we hear Liberal ministers trumpet that B.C. has the lowest personal income tax rate in the country - at least twice a week, I'd guess.

Martyn Brown, chief of staff to departed B.C. premier Gordon Campbell and political strategist for the Liberals prior to Christy Clark's firing him, spells out the ploy in his new e-book, Towards a New Government in British Columbia, confirms what many taxpayers have known for years: Government is taking more money out of our pockets than ever before.

"Every government is using every means at its disposal to avoid visible tax hikes and to hide the ones they are imposing as far as possible. That does not mean that governments are not raising taxes," wrote Brown.

"Governments everywhere are raising fees, licenses, premiums, penalties, levies, utility rates, tolls and other hidden forms of taxes. They are charging new fees for services, they are extracting new and higher hidden taxes from Crown corporations. And they are deferring tax burdens to future generations through debt, deferral accounts and public-private partnerships."

One of the stated reasons the Liberals created the new ferry structure in their first mandate was to stop political interference into the running of the corporation. It hasn't worked.""

[logicalview]

""Liberals' plan for B.C. Ferries hasn't worked

Neither did the FastCat Fiasco for the NDP.

Completely privatize the operation and fire them all.

[NAB]

An interesting overview covering the history of what is now BC Ferries, what isn't working, and why. Note the suggestion for the future at the end....
Nab

"BC Ferries: a flagship aspiring to become a utility, or a utility aspiring to become a Flagship?"

http://www.canadiansailings.ca/?p=3557

[logicalview]

Good link Nab.

While plans announced in September 2011 for cost-cutting and the reorganization at the executive level may offer short-term solutions, a large question remains as to what future direction the ferry service should take. Privatizations of these types of services in B.C. are a highly unpopular concept, but with increasing pressures on government for intensified health and education spending, this could be an unhappy outcome to maintain a vital transportation link.

Hey, if everybody is complaining about it,why not dispose of it just like BC Rail and spend the money on teachers and nurses.

[NAB]

Which leads me to re-state my main point... NOT everybody is complaining about it, or at least complaining about the same thing although the two general complaints come together around the out of control fare increases, particularly on the mainland-main island runs. Not only are they punishing their bread and butter customers and driving them away, but punishing the Main Island tourism businesses as well.

Of the 3 major routes between the main island and the lower mainland, two are profitable and one is not (although to my mind they too are overserviced and need much further cuts to the schedules because they typically operate at less than 50% capacity), ...while virtually all the little island hops (and those using them) are subsidized at the expense of passengers on the profitable ones as well as the by the general taxpayer so everyone loses (except those benefiting from their subsidized fares on the little island hops of course). No one created this situation but the current government and Hahn, yet other than some token mild cuts to the 3 main routes that no one will miss, they sit on their thumbs and essentially do nothing about dealing with the real problem - because of political interference that reacts to political issues rather than sound economic business practices. I think the Hardy - Rupert run should be a private one also, or eliminated all together.

I pretty much agree with the proposal to privatize the main 3 or 4 routes, and let the government run all the little routes as a basic essential service with no profit motive much the way they deal with interior mainland ferries, but with each route expected to fully cover its own costs without subsidy from other routes or taxpayers in any way.

Nab

[Smurf]

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.

[NAB]

I believe it used to be part of our highway system Smurf, but it ceased being that about 9 years or so ago

Nab

[Homeownertoo]

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.