Passenger traffic slumping, Hy-Line gets financial relief from SSA

Passenger traffic slumping, Hy-Line gets financial relief from SSA

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In its first meeting of the New Year, held in Woods Hole on January 14, the Steamship Authority (SSA) provided financial relief for the privately operated Hy-Line ferry service on its high-speed Nantucket route.

The SSA members approved a management recommendation to modify the company’s license, so that the private ferry service will not be required to pay the SSA for passengers it carries on the high-speed Grey Lady during the winter season, when the boatline will not provide high-speed service.

“Without this limited reduction in its license fees, there was a possibility that Hy-Line would no longer be able to provide its high-speed service during the unprofitable winter months,” said the SSA in a management report.

The agreement is for three years and comes with the expectation that the company will not ask for any further modifications to either of its license fee schedules on its Vineyard and Nantucket routes.

The SSA’s enabling legislation requires companies that transport freight, passengers, or autos in vessels of a certain tonnage from the Massachusetts mainland to be licensed by the authority. License fees are intended to mitigate the boatline’s losses to private competitors, particularly during the lucrative summer months when authority profits are counted on to offset winter losses.

Without winter payments, the SSA estimates that Hy-Line will pay between $325,000 and $550,00 in fees for 2009, depending on the number of passengers it carries.

Marc Hanover, Vineyard SSA member, said he agreed to go along with the proposal, for several reasons. Winter service is maintained, the Nantucket member supported it, and it allows the SSA to reduce operational wear on its own high-speed vessel, the Iyannough.

“The good part of it for the Steamship Authority is we don’t have to beat up our boat,” said Mr. Hanover. “If we carried all the passengers for those three months we would still lose more than $200,000.”

Any savings realized on the Nantucket route would be good news for that island’s ratepayers. SSA fares are calculated to pay for the costs of service on each route. Less Nantucket traffic means fewer ratepayers to pick up the costs of service, and the news is not good.

In a report on year-end 2008 traffic statistics, management reported that Nantucket saw decreases from 2007 levels in passenger traffic (off 5.7 percent), autos (3.1 percent) and trucks (7.6 percent).

By contrast, Vineyard 2008 traffic levels remained relatively stable when compared to the previous year. Passenger traffic was up 1.4 percent, auto traffic was up 0.3 percent, and truck traffic was up 0.1 percent.

In other business, the SSA reported that the Oak Bluffs terminal reconstruction project is on schedule. The second phase of construction is expected to be completed by the end of April.

The board also approved payments for design services for phase three, which will include the construction of a new covered passenger walkway to the pier, a passenger waiting deck attached to the back of the terminal, site improvements to the Seaview Avenue pick-up/drop-off area and extensive renovations and modifications to the terminal building.