Fuel Costs Drive Rate Hikes at SSA

By JAMES KINSELLA
Gazette Senior Writer

Vineyard and Nantucket governors on the Steamship Authority anticipate that fuel costs will drive boat line rates higher in the coming year.

"We haven't had a rate hike since 2003," said Vineyard governor and board chairman Marc Hanover. "We're certainly due . . . we've had a nice ride of it, but the ride is over."

"We're hoping for a little more efficient operation, but there's only so much you can do," Nantucket governor Flint Ranney said.

SSA staff are working on a proposed operating budget for the coming year. The budget is scheduled for release at the monthly boat line meeting Thursday in Hyannis, set to begin at 9:30 a.m. at the Hyannis terminal.

Boat line general manager Wayne Lamson has projected revenues for next year at about $72 million, which reflects a five per cent increase. Proposed operating expenses are estimated at about $68 million.

Mr. Lamson said last week that he anticipates the SSA will need to raise rates to balance its budget in the coming year. The state-chartered boat line operates the only year-round vehicle/passenger ferry operation between the mainland and the two Islands.

SSA governors are scheduled to vote on a final budget for 2006 at their October meeting on the Vineyard.

Also on the agenda for this Thursday is a board vote on summer and fall 2006 operating schedules. Mr. Lamson said SSA staff is interested in saving money by tweaking the schedules to drop less-needed trips.

But the anticipated delay in the arrival of the Island Home, the new ferry being built for the Vineyard route, will constrain those options. Mr. Lamson said boat line staff had hoped that replacing the ferry Islander with the Island Home, which will have a larger freight deck, would allow the SSA to cut back on freight vessel runs.

The Island Home had been slated to start service around June 2006. But then Hurricane Katrina came barreling into the Gulf Coast, including the V.T. Halter Marine Inc. shipyard in Pascagoula, Miss.

No new information was available yesterday concerning the Island Home's components, which apparently survived more or less intact. But given damage to the shipyard and the surrounding community, Mr. Lamson anticipates the Island Home might not enter service now until late 2006 or early 2007.

In other SSA developments, the high-speed ferry Flying Cloud returned Saturday to service on the Nantucket route after engine trouble sidelined the vessel for most of last week. Until last week's problem, the Flying Cloud had been performing more reliably this year than in past years. For the first eight months of the year, passenger volume was up 13.3 per cent on the vessel.

As for overall operations, Mr. Hanover said boat line managers are doing a great job in making the boat line more efficient. But he said a number of trends are beyond their control.

"Fuel, insurance and medical are killing us, in that order," Mr. Hanover said yesterday. "That's where the big issues are."

Mr. Ranney said he was opposed to rate increases in general. But he said the SSA must contend with the rising cost of fuel.

Both he and Mr. Hanover suggested that rate increases should be spread across the SSA's different user groups, including foot passengers and drivers with automobiles or trucks. "I think it should be across the board," Mr. Hanover said.

Mr. Ranney, meanwhile, said he likes the idea of a fuel surcharge: a specifically identified part of a rate increase that could be removed should fuel prices drop back down.

With their weighted votes, the two Island governors voting together have an instant majority of 70 per cent. To the extent Mr. Hanover and Mr. Ranney agree, the SSA follows their decisions.

Mr. Hanover, who periodically meets with the Dukes County Commission to discuss boat line issues, is slated to do so at tomorrow's commission meeting. The commission is scheduled to meet at 5 p.m. at the county administration building at the Martha's Vineyard Airport.

The proposed rate hikes come against a backdrop in which SSA passenger traffic for the first eight months of the year is off 3.1 per cent on the Vineyard route, and up 2.3 per cent on the Nantucket route. Overall, boat line passenger traffic is off 2.1 per cent through August 31.

For the first eight months of the year on the Vineyard route, automobile traffic is off 1.4 per cent and truck traffic is up 9.7 per cent. Overall SSA automobile traffic is off 1.4 per cent, with overall truck traffic up 10.7 per cent.