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.