British Columbia Ferry Services Inc. announced a package of cost savings measures today, including the retirement of president and CEO David Hahn.

In a statement Hahn said the measures are a prudent response to falling traffic levels. "This past summer, we have seen a significant drop in our traffic levels and we need to manage our costs to match our anticipated revenue short fall for this fiscal year," he said.

"This drop off in traffic is largely due a number of factors, including a weakening economy, decline of the American tourism market and an exodus of Canadian tourists to the United States,” he said.

The release, which failed to note fares have risen significantly under Hahn's management, noted that vehicle traffic is at an 11-year low and passenger traffic is at a 20-year low.

Aside from his retirement at the end of the year, Hahn announced the company will ask the provincial government if it can cancel 400 round trips a year on the major routes between Vancouver Island and the Lower Mainland.

There will be a hiring freeze for non-essential positions, a two-year freeze on wages and salaries, early retirements, the elimination of the long-term incentive plan for executives and the reduced use of contractors and consultants. The company will also cancel its advertising partnership with the Vancouver Canucks, delay capital expenditures by 18 months and eliminate "many charitable and community donations."

BC Ferries has said it expects to lose $20 million in the fiscal year 2011-2012. The measures announced today should save $11 million, Hahn said.

"It’s my choice to retire and it is on my terms that I’m leaving," he said. "This has not been an easy decision, but it will help facilitate a more constructive dialogue around future service levels and funding."

"I think David Hahn's run his course," said Richard Goode, president of the B.C. Ferry and Marine Workers' Union.

Hahn was brought in to break up the ferry system and facilitate routes being taken over by other companies, Goode said. "He ended up embracing the ferry system. His original mandate changed."

With Ferry Commissioner Gord Macatee in the middle of a review of BC Ferries and the Coastal Ferry Act for Transportation Minister Blair Lekstrom, it makes sense for Hahn to go now, said Goode. Whoever replaces Hahn can work with the commissioner to fix the problems, he said.

Goode said reduced sailings should not lead to layoffs of union members. "Where it will affect us is the casuals. The casuals will be hit hard," he said. Many have had steady work for the last four years, he said.

Without incentives being offered for early retirements, Goode said it is unlikely many workers will take them.

Goode said he supports canceling the advertising at Canucks games, noting that BC Ferries is a monopoly that should not require that kind of promotion.

Andrew MacLeod is The Tyee’s Legislative Bureau Chief in Victoria. Reach him here. He posted this story while aboard the Spirit of Vancouver Island.