VICTORIA — BC Ferries is looking to cut as many as 400 sailings per year
due to financial losses that are largely a result of declining traffic
and passenger levels.
David Hahn, the company’s chief executive officer, said that’s a small
fraction of the 10,000 sailings the corporation runs per year, but he
said the financial picture will likely get worse by the end of the year,
so action is needed now.
“Our plan is to deal with it by reducing overheads, looking if there’s
some early retirements, a hiring freeze, cutting advertising and of
course looking at whether we can get government approval to reduce just a
small amount of the sailings that we do on the major routes only,’’ he
said in an interview.
Hahn said passenger traffic has dropped 2.9 per cent this quarter as
compared to the same quarter last year, and vehicle traffic has dropped
3.3 per cent.
That amounts to the largest passenger decline in recent years and
represents a 20-year low. Vehicle traffic is at an 11-year low.
But Hahn said ferry fares aren’t the main culprit.
“You’ve got a soft economy, you’ve got a strong loonie, so people have
better value options down in the States. The price of fuel has impacted
travel and I think if you look at airport statistics (and) hotel
occupancy rates, you’ll see that everybody’s down. It’s more than just
ferry fares,’’ he said.
“I’m not saying that ferry fares don’t have a role to play in this, but
clearly there’s something more going on than just the higher cost of
riding the ferry.’’
Hahn said in a news release the company originally planned for a net
loss of about $ 20 million for this fiscal year, mostly a result of the
declining traffic and refit and maintenance programs, among other
things.
And things are getting worse.
“The year-end loss could be significantly higher,’’ he said.
Before the routes can be cut, the commission that oversees ferries must agree to it.
Earlier this year, the ferry corporation announced plans to raise rates
four per cent on major routes each year for the next three years, and
eight per cent on minor routes.
That prompted a storm of objection and the government ordered a review
by ferry commissioner Gord Macatee, whose work is expected to be
completed early next year.
Premier Christy Clark said Wednesday her government is concerned about
how rising ferry fees affect British Columbia families, but she also
said the corporation must remain sustainable.
“I’m concerned about the financial stability,’’ she told reporters in Vancouver.
“I’m alive to the issues that are there. They’re serious and we need to be responsible in addressing them.’’
In May, the B.C. government brought in legislation to cap fare increases
on BC Ferries to four per cent next year and block the company from
reducing service until a review of fares is completed.
Hahn said it makes no sense to have some ships sailing with just 20 per cent occupancy.
He said the company will also be cutting capital spending and there may be some staff reductions.
— Written by Wendy Cox in Vancouver
Local news from metronews.ca/vancouver
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