BC Ferries profits reduced due to wages and maintenance

If they could find a way to run the ferries without employees or maintenance who knows how much money the fleet could make.

BC Ferries released details into their financial figures last week, which show that the Ferry Corporation made 61 million dollars in profit for the three month period ending in September. It’s a number that is down roughly 8 million dollars from the same time last year.

Not included in the financial picture of quarterly installments is the multi million dollar process currently underway, which will replace key assets in the BC Ferries fleet, mostly on the southern routes.

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However, wage increases and a rise in maintenance costs did figure into the quarterly bottom line for the summer season.

The Daily News provided some background Monday, on the cash counting of the flotilla.

Wages, maintenance costs dampen BC Ferries' profits
The Daily News
Monday, December 03, 2007
Page three

British Columbia Ferry Services Inc. says its profit dipped in the second quarter, despite higher revenues and not accounting for a multi-million investment in its fleet.

The ferry service, one of the largest in the world, said Wednesday that its profit was $61 million for the three months ended Sept. 30, down from $68.9 million for the same period last year.
Revenue in the quarter increased to $220.2 million from $202.9 million last year, while total expenses increased to $159.2 million from $134 million.

The higher expenses includes a $5 million increase in wages and benefits, a $7.3 million increase in maintenance costs and a $6.9 million increase in interest and amortization expenses resulting from new vessels and other assets entering service, the company said.

"These earnings allow us to continue our extensive fleet and asset renewal program to ensure the ongoing safety and reliability of our operations," said David Hahn, BC Ferries president and CEO.

The earnings do not include the $80.2 million invested in BC Ferries’ fleet, terminals and information systems in the six months ended Sept. 30.

The investment includes $56.8 million new vessels, vessel upgrades an modifications; $12.4 million in terminal marine structures; $8.5 million in terminal and building upgrades and equipment and $2.5 million in computer hardware and software development.

“Our commitment to rebuilding our infrastructure is already showing positive results with two new ships added to the fleet last year and significant upgrades well underway at many of our terminals, including extensive modifications to prepare for the arrival of our three new Super C-class vessels entering service next year,” the company said.

The ferry operator provides year round transportation on 25 routes using 36 vessels and 47 terminals. BC Ferries also manages other remote routes through contracts with independent operators.

However, North Coast MLA Gary Coons said a recent decision to increase ferry fares next spring shows just how disconnected B. C. Ferries remains from those communities that depend on it as part of their provincial highway.

This month, the B. C. Ferries Commissioner noted that an error means that ferry rates on major routes will increase 7.4 percent, not 6.4 per cent as previously announced.

“These out-of-control fare increases are a direct result of the Campbell government’s decision to sever the connection between B. C. Ferries and coastal communities,” said Coons.

“It’s time for the Campbell government to get a grip on the situation and start protecting our communities from on going fare hikes.”

Coons introduced a motion in early November that calls for the freezing of fares until a “Ferry Dependent Communities Strategy” is enacted. The Strategy would ensure the long-term viability of ferry routes to remote communities and the viability of those communities. North Island NDP MLA Claire Trevena has introduced a motion calling for ferries to be considered part of our public highway system.

”The Campbell government needs to treat the ferry system as part of our highways and freeze the current fares until there’s a consultation protocol in place,” said Coons. “For island communities and businesses, ferries are the only option they have to get anywhere. They are our marine highway.”