Ferries stuck in downward spiral

Increasing sales (traffic) through promotion, incentives or any other means is vital for B.C. Ferries.

To the Editor,

I was a participant in the recent B.C. Ferries consultation and engagements at the Coast Bastion Inn.

The discussion guide provided was informative and somewhat revealing at the same time.

Its focus was mainly with respect to service cuts and cost savings, both admirable objectives in themselves, but the process of raising prices and cutting service to reduce costs is a never ending downward spiral that most businesses never recover from.

The guide made no reference to increasing sales (traffic) through promotion, incentives or any other means.

The Ferry Commissioners’ report reviewed the Washington State Ferries 2009 plan where incentives, advance, no fee, bookings and promotions were to be the order of the day to encourage increased usage. This observation was perhaps lost on the B.C. Ferries administration.

Each ferry sailing is basically a ‘fixed’ cost with fuel, wages and capital costs constants. The only variable is the revenue through sales of services, in other words, vehicle and passenger traffic.

I can, at my home computer, seek, book and print a ticket or a boarding pass for most any kind of travel almost anywhere in the world, except to cross Georgia Strait by B.C. Ferry.

B.C. Ferries needs an online, no fee, booking system for travel on selected routes. This, in addition to some rationalization of sailings on low volume routes, could have a major impact on the bottom line.

While this was the main objective of my attendance, with several of the other attendees voicing similar comments, I noted  a couple of other points of interest:

u A $6-million preferred share dividend to the B.C. government as the only shareholder. Dividends are usually paid out after tax and out of profits. If there is no profit, why are the dividends still being paid?

I view this as a tax.

* An $18-million deferred fuel account to be paid out of future revenues. This was a result of the fare cap imposed by the commissioner.

Why not eliminate the dividend and pay off the deferred fuel account?

* a $275-million, unfunded, defined pension plan for ferry workers. Only public sector workers have defined benefit pensions. This should be funded and a defined contribution plan implemented.

* The Duke Point route, while being the fourth busiest in vehicle and passengers, had a $29.8-million shortfall. It is similar to the Horseshoe Bay– Bowen Island route in volume and utilization, yet it has five times the loss. An anomaly that must be explored and fully explained by B.C. Ferries.

I hope it was listening.

George Creek

Cedar

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