BC Ferries Reports Decreasing Ridership

August 29, 2008 4:23 p.m. EST

Victoria, British Columbia (AHN) - British Columbia Ferry Services Inc., one of the largest ferry operators in the world, announced Thursday an earnings slump in the first quarter due to the acquisition of new ferries, record fuel prices and decreasing ridership.

BC Ferries, which services major routes connecting Vancouver Island and the Lower Mainland, posted net earnings at $8.4 million for the quarter ended June 30 as against to $14.4 million over the same period last year, a $6 million drop.

The Times Colonist reported David Hahn, BC Ferries president, forecasts that last year's record ridership of 21 million passengers and 8.5 million vehicles will drop by four to six percent or by about one million passengers as result of increasing gas prices.

Revenues were up 7.6 percent to $171.9 million. Expenditures for the quarter also increased 12.4 percent to $163.5 million and was due to increase in fuel expenses, increase in interest and amortization expenses and capital investments.

BC Ferries invested $190.0 million in additional assets: $171.8 million in new vessels, vessel upgrades and modifications; $8.3 million in marine structures; $7.5 million in improving terminal facilities and equipment; and $2.4 million in systems and hardware development.

This year, the ferry company had two fare hikes: rates for a car and driver on major routes increased to $56 from $53.80 last April and a fuel surcharge, which increased the fare to $61.40 early this month.

If oil prices continue to drop, BC Ferries could rollback the fuel surcharge "maybe by the middle of next year," says Hahn

In its 2007/2008 annual report, the company posted net earnings of $37 million for the last fiscal year. It projected $10 million in net earnings for the fiscal year.

BC Ferries serviced more than 21 million passengers and 8 million vehicles as of the fiscal year ended March 31.

It services West Coast of Canada on 25 routes and has a fleet of 37 vessels and 47 terminals.