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BC Ferries' revenue up despite carrying fewer passengers

VICTORIA – Despite a significant drop in traffic last year for British Columbia Ferry Services Inc., revenue grew thanks to passengers paying as much as 25 percent more to ride the ferries.

“Vehicle and passenger traffic were lower than the prior year by 5.2 [percent] and 4.9 [percent] lower, respectively,” said B.C. Ferries Management's Discussion and Analysis for the fiscal year ended March 31, 2009 released yesterday on SEDAR.

Still, the government-owned private company managed to collect 6.4 percent more revenue in that period than it did a year earlier. The gain appears to come mainly from the higher fares and fuel surcharges the company charged.

The tariffs collected from passengers increased from $141.6 million to $160 million, an increase of 13 percent even as ridership fell.

“The impact on total tariff revenue of these lower traffic levels was more than offset by the increase in average tariffs,” said the report.

On the northern routes, it said, “The average tariff revenue per vehicle increased $51.29 or 24.6 [percent]. The average passenger tariff revenue increase was $15.24 or 24.7 [percent].” Most of the increase was from fuel surcharges now included in the tariff revenue.

On the major routes the fares went up by 18 percent for vehicles and 19.5 percent for passengers, it said, roughly the same as the fare hike on the rest of the company's routes.

The ferry company blamed the drop in traffic on “the decreasing level of economic activity, reduced level of tourism, rising unemployment, reduced consumer confidence and higher vehicle fuel prices earlier in fiscal 2009.” Bad December weather also played a role.

The report does not acknowledge until page 39, in a section on the risk from rising fuel prices, that raising fares might affect traffic. “There is uncertainty of the impact on future ferry traffic levels if fuel surcharges and therefore total tariff costs rise significantly.”

Higher costs might drive traffic down, it said.

While revenues increased for B.C. Ferries, so did expenses which were 9.7 percent higher than last year. That resulted in net earnings of $9 million, compared to $37.1 million a year earlier.

Andrew MacLeod is The Tyee’s Legislative Bureau Chief in Victoria. Reach him here.

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