SSA agrees to forgo some Hy-Line license fees

Fee relief covers certain winter runs on Nantucket route
Overall Nantucket market continues decline; Vineyard remains stable

By James Kinsella

Most businesses wouldn't consider, let alone agree to, taking in less money to keep a competitor operating.

As part of the agreement, Hy-Line won't have to pay licensing fees onits high-speed ferry service between Hyannis and Nantucket when theauthority isn't providing high-speed service itself.

But the Steamship Authority - whose state-legislated mission is to provide year-round ferry service between the mainland and the islands of Nantucket and Martha's Vineyard - isn't most businesses.

Last week, the authority board agreed to a new three-year licensing agreement with Hy-Line, the private ferry company based in Hyannis that is the boat line's largest competitor.

As part of that agreement, Hy-Line won't have to pay licensing fees on its high-speed ferry service between Hyannis and Nantucket when the authority isn't providing high-speed service itself.

"Without this limited reduction in its license fees, there was a possibility that Hy-Line would no longer be able to afford to provide high-speed service during the unprofitable winter months, and we concluded that it was important to ensure that Nantucket residents have high-speed ferry service on a year-round basis," stated Wayne Lamson, general manager at the Steamship Authority.

Under the agreement, Hy-Line will continue to pay the Steamship Authority license fees on all the passengers the company carries the rest of the year, which is expected to bring in between $325,000 and $550,000 this year.

The agreement is based on the expectation that Hy-Line won't ask for further modifications to its Nantucket or Vineyard license agreement for the three-year period.

Traffic declines on Nantucket route

As a further indication of the slowing Nantucket market, Steamship Authority traffic on that route fell last year. Passenger traffic was off 5.7 percent, with high-speed passenger traffic down 9.8 percent; automobile traffic was off 3.1 percent; and truck traffic was down 7.6 percent.

Traffic on the Vineyard route, however, was stable or slightly up. Passenger traffic increased 1.4 percent, automobile traffic was up 0.3 percent, and truck traffic rose 0.1 percent.

In other developments:

  • The Steamship Authority purchased call options that will cover 92 percent of the boat line's expected fuel oil use for the next 18 months. The options will help provide protection against the possibility of sharp price increases while allowing the boat line to take advantage of the current relatively low prices. Lamson said the most the boat line will pay for vessel fuel this year is $3.12 per gallon. Most recently, the authority paid $1.92 per gallon.
  • The board awarded a contract for $297,444 to the Thames Shipyard & Repair Co. of New London, Conn., for the dry-docking and overhauling of the Governor, the freight ferry that operates in the warmer months on the Vineyard route. The vessel will be in the shipyard from mid-March through mid-April. The boat line also is preparing to open bids next month for the dry-docking and overhaul of its high-speed ferry on the Nantucket route, the Iyanough.
  • Board members learned of another possible indicator of a slowing economy on the Islands: fewer reservations being made in the Headstart program, under which Islanders can make vehicle reservations for the summer season. "We should have a better idea of what lies ahead for this year's summer season a few weeks after we open up reservations to the public later this month," Lamson said.

Read about Hy-Line's request for fee relief here.

Read about the SSA's move toward fuel price hedging here.

 

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