Disappeared News

Why didn't I think of that? Joan Conrow's post today on KauaiEclectic, Musings: Ferry Fiascos, describes ferry disasters in other places such as Vancouver, BC. Please read her entire article, but here is the closing paragraph:

These scenarios could be flukes in the ferry world, or cautionary red flags that we might want to consider. Of course, it’s hard to know, without a full Environmental Impact Statement, whether Hawaii Superferry is a true gift, or a Trojan horse.

Trojan horse! That's the phrase my brain could not come up with the other day when I wrote about how the Superferry may be coming here as a civilian vehicle but may have a larger military purpose. 

How can we tell if the Superferry is really a military operation? Short of being a fly on the wall or an NSA phone tapper, we can't know what secret talks have been held. But should the ferry ply our waters at a loss, it's a hint that the money will be coming from somewhere.

Earlier I did a back-of-the-envelope calculation on how profitable the ferry could be. But here is another, and better, analysis done by Prof. Dick Mayer that has been circulating via email. Follow along and see how the Superferry could well operate at a loss for the civilian portion of its business. I'll come back at the end with my take on the numbers.

Ok, here are the estimates (paraphrasing the original email).

Revenues

According to the company, they expect an average load of about 400 people, and 110 vehicles per trip.

400 passengers x $72 = $28,800
110 vehicles x $65 = $7,150

Total $35,950 per trip

Total trips scheduled per week 26

Therefore estimated revenue per Superferry would be $35,950 x 26 = $934,700 per week.

Expenses

John Garibaldi, Superferry's president and chief executive, stated that the weekly operating cost while the ship is idle and docked at Honolulu Harbor is $650,000 per week.

The current price for marine diesel fuel in Honolulu is $740/metric ton or at least $2.07 per gallon.

If fuel consumption per one way trip is about 6,600 gallons, Kauai or Maui, so the average fuel cost (one way trip) is 6,600 x $2.07 = $13,662

At 26 trips per week x $13,662 = $355,212 per week for fuel. 

So the operating cost including fuel would be $1,005,212 per week.

Oops. 

So based on Superferry's projected load factors, there is an operating loss of $70,512 per week, or $3,666,624 per year.

Even today, a few million bucks is real money. How could the Superferry break even or turn a profit? You got it—pick up that military business.

Or raise fares, of course. Since I can't rent a car at the other end of a ferry ride, I would probably stick with cheaper air fares if the ferry charges too much.

Or maybe civilian passengers aren't the point here. If it's aTrojan horse, then maybe this whole thing is just a way to get those presumably lucrative military contracts. A Pacific Business News article from 2004 (yes, three years ago) revealed that part of the business model was to

Seek defense business, hauling vehicles between islands at night for military exercises. The ferries are being built with specially reinforced vehicle decks especially for this, though the reinforcement also means that big rigs can be driven onto the ferries and it won't matter in which lane they park.

If the Legislature let's them in without restrictions, Strykers will have a new way to get around, but we may not. The Superferry is made for them, as the article reveals.