INDEX - HAWAII TRANSPORTATION
SUBJECT: SUPERFERRY BACK IN SERVICE
SOURCE: DICK MAYER firstname.lastname@example.org
POSTED: 27 APRIL 2008 - 2:30pm HST
Superferry riderships still falls short
image above: No, it is not the abducted on a flying saucer. It's just a night trip aboard the HI Superferry
by Dick Mayer on 27 April 2007
Garibaldi boasts that they have 2,000 passengers over 4 days this weekend.
On each transit this is only 250 passengers per trip!
(2,000 / 8 one-way transits ==> 250)
Unfortunately for HSF, they claimed that 400+ passengers needed to pay the FULL fare to even break-even on the 866 passenger vessel.
But HSF is giving away tickets for only $39, about half the price that would be charged if HSF was charging the PUC approved fare which includes a fuel surcharge.
(Those full fares are supposed to start on June 6. Will passengers be willing to pay those fares, especially during the barf-inducing winter season?)
And with a 2nd ferry run starting in 10 days at those give-away fares, they seem to be in deep kim-chee. That is probably why J. F. Lehman & Company is having to throw more cash into the project. Witout the infusion of capital, they may default on the MARAD loan provisions.
and here's more...
New CEO a boost to ferry
image above: Lehman's last coffeebreak with Garibaldi. Altered by Juan Wilson
by Edwin Tanji on 27 April 2008 in The Maui News
Retired Adm. Fargo’s appointment coincides with influx of financing.
In naming a new president and chief executive for the Hawaii Superferry, the chief investor in the interisland transportation business also made a “significant increase” in financing the business, outgoing President John Garibaldi said Friday.
Garibaldi, who will remain vice chairman and a board member, said the move to appoint retired Adm. Thomas Fargo as president/CEO is an indication of “the commitment to bring really big talent here.”
“We’ve had an increase in the capital base from J.F. Lehman & Company that bodes well for taking us through the difficult times and really supplements the commitment,” he said.
In a telephone interview arranged by the Superferry, Fargo said he was invited to join the company, adding that he has known former Navy Secretary John Lehman — the head of J.F. Lehman — for many years.
While he said he needs to study the operations and understands the changeable ocean conditions that have been a factor in the ferry’s difficulties, he saw no reason the vessel cannot operate successfully year-round.
Garibaldi guided the Superferry through its startup, which has run into major obstacles in the courts and at the docks.
In August, a Hawaii Supreme Court ruling found that the state Department of Transportation improperly waived a requirement for an environmental assessment in setting up state harbors for the ferry operations. Legal disputes held up ferry operations from August through December last year, with the state Legislature in October approving a law to allow the ferry to run while an environmental impact statement is prepared.
A state auditor’s report two weeks ago detailed the debate within the Department of Transportation in 2004 that had top state transportation officials rejecting recommendations that an environmental assessment be required. A key factor apparently was a federal Maritime Administration loan guarantee that would have been lost if the ferry operation was held up for an environmental impact statement.
Even after the ferry was allowed to operate beginning in December, it was first delayed by damage to the docking barge in Kahului Harbor caused by harbor surge. The service was shut down periodically because of heavy seas in December and January that ultimately forced the 350-foot catamaran into drydock to repair damage to its auxiliary rudders.
The Alakai finally resumed service April 7 between Oahu and Maui. Its planned Kauai operation remains shut down, with Garibaldi saying the company is focused on establishing its ability to provide “good, reliable service. . . . We want to get our Maui service going well first.”
“On Kauai, we’re still monitoring the situation,” he said.
The Oahu-Kauai service, initiated Aug. 26, was shut down Aug. 27 after protesters in Nawiliwili Harbor blocked the ferry despite Coast Guard and state enforcement officers being on the scene.
Garibaldi declined to detail the amount of the capital infusion provided by J.F. Lehman to keep the business operating except to say it will allow Superferry to continue to work on building its loads. He said bookings have been steadily increasing with the revival of regular service.
“When we were operating in December, January and February, we saw increased bookings every day. Since the day we came out of drydock, every day it’s been increasing; we’re seeing a continual upturn in bookings,” he said.
Over the weekend, he said, there were more than 2,000 passengers booked on the four round trips from Friday through Monday. While the ferry has a capacity of nearly 900 passengers, the company was projecting that a normal load of 400 to 450 passengers could cover its operational costs.
The ferry can also carry as many as 282 vehicles, and its marketing plan includes use by businesses transporting products and workers between the islands. Maui Land & Pineapple Co. is a local investor in the Superferry and indicated interest in using the ferry to transport its products between the major islands.
Fargo, who was commander of the Pacific Fleet at Pearl Harbor beginning in 1999 and took over as commander of all U.S. military operations in the Pacific in 2002, said he remained in Hawaii after he retired in 2005 because “we really liked it here and we got a lot of encouragement from folks to stay.” But he had no role with Hawaii Superferry until he was asked to take over the top executive positions, he said.
“I had actually gone out on the Superferry in January and watched it from a distance in my capacity in Hawaii, and I think it provides an opportunity. Both John Lehman, whom I’ve known for a long time, and some other local folks suggested that my skill sets might bring a great deal to this company,” he said.
He said the month of May will show that the Superferry provides a “really necessary capacity for Hawaii” in terms of transportation options, with the shutdown of Aloha Airlines and the loss of air travel capacity a factor in the development.
Fargo’s skill sets include a familiarity with the ocean conditions around Hawaii in all seasons, and he said he understands the conditions that create Hawaii’s best-known surf breaks. He said he also understands that Superferry needs to show it can provide reliable service.
“The vast majority of the year, the operations will be very easy. During the tough periods, when the sea states are high, we’re going to have to adjust our operations and procedures. But there is nothing that’s going to prevent the ship from operating 12 months of the year,” he said.
“I’m going to fulfill the role as president and CEO. I’m the guy responsible and by my very nature, I’m a hands-on guy who’s going to be working on every facet of this business.”
SUBJECT: =SUPERFERRY BACK IN SERVICE
SOURCE: BRAD PARSONS email@example.com
POSTED: 27 APRIL 2008 - 2:30pm HST
HI Superferry: It's still about the fuel, guys...
image above: graphic by Nick Kocher in /www.theage.com.au
by Brad Parsons on 27 April 2008
Noticed all the articles and quotes over the past few days. The article today in the Maui News was particularly breathtaking. Wish the new CEO all the best on this endeavor. Decided to do an updated look at the marine diesel fuels costs as of today.
Some quick calculations:
Marine Diesel Oil fuel price today is $1069 per metric ton.
The conversion for diesel metric tons to gallons is 313 gallons/MT.
Alakai burns about 1,950 gallons per hour for three hours per one-way, times 2 for the round-trip to equal about 11,700 gallons per RT. At $3.41 per gallon by the above current price and conversion, that would be about $39,900 in fuel costs over this weekend per round-trip.
At $39 per person and $55 per regular vehicle, HSF would need to transport:
350 people per one-way transit and 115 vehicles or
700 people per RT and 230 vehicles per round trip.
just to cover fuel costs, which would include:
2800 people for four days.
So, "2000 people in 4 days" still will not even cover fuel costs, assuming the "2000" figure is accurate.
Here are some related interesting quotes from the former CEO of Austal-USA:
HSF confident they can compete with airlines.
by Howard Dicus on 19 January 2007 in Pacific Business News
...Whether Hawaii Superferry will be profitable is something that concerns Alan Lerchbacker, the former CEO of Austal USA, which built the ferry.
"I just worry about getting enough business to cover costs because of the sheer size of it," said Lerchbacker, who came to Hawaii to sell the ferry but works in another industry now.
Lerchbacker said he suggested a 72-meter vessel only to see the company order the 100-meter model.
"For a smooth ride on the ocean, that ferry will have to go over 35 knots, and it costs a lot of money on fuel to go that fast," he said. "They may need 400 to 500 passengers to break even."
...Lerchbacker frets about this, and clearly thinks Hawaii Superferry should have gotten a smaller boat, but he doesn't want the venture to fail...
The problem is not actually weather or wave conditions. The problem is a design that is fuel cost ineffective. A new CEO with qualifications beyond those necessary for this won't necessarily solve this problem, unless he can convince the principals that they need to go to a different vessel in the intermediate to long-term for this service.
Island Breath: HSF audit shows crime 4/19/08
Island Breath: HSF to restart service 4/12/08
Island Breath: HSF Task Force Reports 4/2/08
Island Breath: HSF after the fact EIS 3/20/08
Island Breath: HSF dry docked 2/9/08
Island Breath: HSF Rudder Mess 2/5/08
Island Breath: January HSF News 1/24/08
Island Breath: HSF night trips 1/11/08
Island Breath: HSF military trips 1/8/08
Island Breath: HSF EIS Smoking Gun 1/6/08
Island Breath: HSF two trips 1/5/08