Post by ferryfast admin on May 7, 2012 11:15:26 GMT -5
Yarmouth ferry service complex issue
May 5, 2012 - 3:55am
By MARK MacDONALD
thechronicleherald.ca/opinion/93094-yarmouth-ferry-service-complex-issue
Since the province of Nova Scotia’s decision to terminate the Yarmouth ferry subsidy in 2009, Bay Ferries has made few public statements out of respect for the difficult decision which government faced at that time. However, this newspaper’s April 30 editorial has caused us to comment. The editorial oversimplified in stating: “No one seriously disputes that the Cat was the wrong vessel — with the wrong fare structure — to make ferry service between Maine and Nova Scotia work.”
Much is made of a “business case” for ferry service from Yarmouth. We are an experienced operator and understand this business. To benefit readers, and to recognize the contributions of our present and former employees, partners and friends throughout Atlantic Canada and New England, and financiers who backed us, I want to introduce some additional facts:
1. The Cat (initial vessel purchased in 1998 and larger 2002 replacement) represented our investment of $100 million-plus in Canadian funds, borrowed from international lenders — we believe the largest private company investment in the history of Nova Scotia’s tourism industry. We are a small local company which assumed big obligations.
2. The high-speed ferry operated without subsidy from 1998 to 2005, carrying record numbers of passengers into Nova Scotia. When the Scotia Prince cruise ferry ceased in 2005, and no other operator stepped forward, the province asked us to take over service to Portland, Me. A modest subsidy was introduced to make this possible. Traffic declined considerably during the recession of 2008-2009. Additional government contributions were required to maintain the service. The Cat was one of the best ships of her type in the world and could easily have been deployed elsewhere. The government decided to maintain the service by agreeing to offset losses we would sustain.
3. About 2004, Bay Ferries realized the Gulf of Maine ferry travel market was changing. Fuel costs were increasing and Americans travelling less. This worsened following new U.S. passport laws. In 2004, we started re-examining the “business case” and all options, including cruise ferries, high-speed ferries, conventional day ferries, etc. It is a tough business proposition. The tourism season for U.S. visitors lasts four months, only four weeks of which are considered peak season. But vessels cannot be bought for six months or chartered for Northern Hemisphere summers, as everyone wants them then; and winter service is a non-starter.
4. We understand the differences and relative merits of high-speed and cruise ferry operations. We have worked for years to identify the best solution. I travelled on one of the world’s top cruise ferry operations in the Baltic last week. Each has strengths and weaknesses:
High-speed ferries travel 35-40 knots, but can be rough in adverse seas. Conventional/cruise ferries typically travel 18-20 knots, but without the high-speed motion. Speed brings capacity; the high-speed ferry could complete two daily round trips from Bar Harbor with inbound capacity of nearly 2,000 passengers and over 400 vehicles.
The conventional/cruise ferry environment expected by today’s customers is extremely capital intensive, with high operating costs, but greater potential for ancillary onboard revenue.
Due to large crews required by cruise ferries, operators (e.g. Scotia Prince) typically rely on cheaper foreign crew. High-speed ferries use small crews. Bay Ferries proudly employs highly trained, local crew (many being members of the Canadian Merchant Service Guild and Canadian Auto Workers unions), many of whom trained in Australia and are world leaders in their field.
High-speed customers typically travel with a vehicle and tour their destination upon arrival. Cruise customers often travel without a vehicle and don’t leave the ship, or do so for one or two nights in the arrival port.
We can make other comparisons. We are not advocating return of high-speed service. The point is that the analysis is complex and without a clear, easy answer. From the government’s standpoint, as this newspaper indicates, an analysis must also encompass the impacts of employment, tax revenue and other community benefits. The province’s appointment of a highly qualified panel to study this matter is a good step.
Bay Ferries stands by the efforts and investment our company, employees and partners have made in this important business. We hope this submission will help those with opinions on Yarmouth ferry service, including this newspaper, better appreciate the complexity of the issue.
May 5, 2012 - 3:55am
By MARK MacDONALD
thechronicleherald.ca/opinion/93094-yarmouth-ferry-service-complex-issue
Since the province of Nova Scotia’s decision to terminate the Yarmouth ferry subsidy in 2009, Bay Ferries has made few public statements out of respect for the difficult decision which government faced at that time. However, this newspaper’s April 30 editorial has caused us to comment. The editorial oversimplified in stating: “No one seriously disputes that the Cat was the wrong vessel — with the wrong fare structure — to make ferry service between Maine and Nova Scotia work.”
Much is made of a “business case” for ferry service from Yarmouth. We are an experienced operator and understand this business. To benefit readers, and to recognize the contributions of our present and former employees, partners and friends throughout Atlantic Canada and New England, and financiers who backed us, I want to introduce some additional facts:
1. The Cat (initial vessel purchased in 1998 and larger 2002 replacement) represented our investment of $100 million-plus in Canadian funds, borrowed from international lenders — we believe the largest private company investment in the history of Nova Scotia’s tourism industry. We are a small local company which assumed big obligations.
2. The high-speed ferry operated without subsidy from 1998 to 2005, carrying record numbers of passengers into Nova Scotia. When the Scotia Prince cruise ferry ceased in 2005, and no other operator stepped forward, the province asked us to take over service to Portland, Me. A modest subsidy was introduced to make this possible. Traffic declined considerably during the recession of 2008-2009. Additional government contributions were required to maintain the service. The Cat was one of the best ships of her type in the world and could easily have been deployed elsewhere. The government decided to maintain the service by agreeing to offset losses we would sustain.
3. About 2004, Bay Ferries realized the Gulf of Maine ferry travel market was changing. Fuel costs were increasing and Americans travelling less. This worsened following new U.S. passport laws. In 2004, we started re-examining the “business case” and all options, including cruise ferries, high-speed ferries, conventional day ferries, etc. It is a tough business proposition. The tourism season for U.S. visitors lasts four months, only four weeks of which are considered peak season. But vessels cannot be bought for six months or chartered for Northern Hemisphere summers, as everyone wants them then; and winter service is a non-starter.
4. We understand the differences and relative merits of high-speed and cruise ferry operations. We have worked for years to identify the best solution. I travelled on one of the world’s top cruise ferry operations in the Baltic last week. Each has strengths and weaknesses:
High-speed ferries travel 35-40 knots, but can be rough in adverse seas. Conventional/cruise ferries typically travel 18-20 knots, but without the high-speed motion. Speed brings capacity; the high-speed ferry could complete two daily round trips from Bar Harbor with inbound capacity of nearly 2,000 passengers and over 400 vehicles.
The conventional/cruise ferry environment expected by today’s customers is extremely capital intensive, with high operating costs, but greater potential for ancillary onboard revenue.
Due to large crews required by cruise ferries, operators (e.g. Scotia Prince) typically rely on cheaper foreign crew. High-speed ferries use small crews. Bay Ferries proudly employs highly trained, local crew (many being members of the Canadian Merchant Service Guild and Canadian Auto Workers unions), many of whom trained in Australia and are world leaders in their field.
High-speed customers typically travel with a vehicle and tour their destination upon arrival. Cruise customers often travel without a vehicle and don’t leave the ship, or do so for one or two nights in the arrival port.
We can make other comparisons. We are not advocating return of high-speed service. The point is that the analysis is complex and without a clear, easy answer. From the government’s standpoint, as this newspaper indicates, an analysis must also encompass the impacts of employment, tax revenue and other community benefits. The province’s appointment of a highly qualified panel to study this matter is a good step.
Bay Ferries stands by the efforts and investment our company, employees and partners have made in this important business. We hope this submission will help those with opinions on Yarmouth ferry service, including this newspaper, better appreciate the complexity of the issue.