01 July 2009

Good afternoon

Yesterday we had the first of the scheduled ‘Round the Island’ trips on Manannan. Due to the first sailing selling out in record time, it was clear that there was sufficient pent-up demand to do it all again later this month. Accordingly, I am pleased to confirm a second ‘Round the Island’ trip on Manannan.  After looking at the schedule, we have decided that the 29th July is a suitable date when Manannan is available. The extra sailing is now open and bookable – and we have already sold 15% of the seats.  So please hurry and book if you don’t want to be disappointed.

Manannan continues to attract many positive comments from our passengers. Some have even compared her on board ‘ambience’ to that of our much loved former ship, ‘King Orry’ – praise indeed!

She was certainly well received during the TT period and made a big difference operationally to the way we were able to cope with the huge traffic peak experienced during this period each year.

I am aware that there are various rumours flying around, so I am happy to confirm that we have chartered Viking to Atlanticoline SA in the Azores for the summer period in much the same way we did with the Lady of Mann for a number of years. We expect to see her back in UK waters around the end of September/early October. She is no longer required by Isle of Man Steam Packet Company but is of course still costing a significant sum of money annually that we must pay to her owners until the charter runs out late next year.

Next month marks the last Tynwald before the summer recess and also in all probability the publication of the final chapter in the long running Select Committee into the company’s fares and charges. The first report confirmed our passenger fares are very competitive and that we are fully compliant with the User Agreement in every respect. We have transformed services and invested over £80million in our fleet over the past decade or so and we believe the final report will confirm our net profit figures rather than the somewhat misleading figures before interest and depreciation are taken into account.  This highlights that the company offers an efficient and value for money service that benefits all residents here on the Isle of Man without the need for a single penny by way of subsidy from the tax payer. That is a situation which many other Island communities do not enjoy, and one which needs to be understood and put in context of an Island population of only around 80,000 people.

We have now started to publish statistics relating to punctuality on our website and hope that these will allow our passengers to understand and be reassured by the continuing drive towards reliability and service standards.

The recession all around us has certainly had an impact here on our traffic levels. The number of freight trailers being shipped to and from the Isle of Man is steadily declining. However, compared to the declines being experienced elsewhere it seems that the Island is still faring better than most. Lets hope that it stays that way.

That’s it for now

Mark

09 June 2009

Good afternoon

TT 2009 is here and is now well underway. The number of visitors and bikes is as we predicted slightly up on last year. Our records show that to date we have brought over to the Island in excess of 9,000 bikes! That is around 5% up on last year. More are also due in the next few days.

So far the weather too has been reasonably kind. Our ships have been kept very busy and with a couple of exceptions have been running remarkably well to scheduled timings which is always difficult given the intensive nature of sailings during the TT period. It is worth noting that the number of sailings increases by some 45% during this period. We will have put on 104 sailings in the run up to race week compared to the normal 72 at this time of year. Many of the return legs involved are near empty or ‘light’ positional sailings and generate little or no additional revenue.

I must give thanks to those other Irish Sea shipping companies who graciously give us wide latitude in terms of berth slots and operational requirements during this period. Without their co-operation, particularly in Heysham, we simply would not be able to run the large number of additional sailings during the TT period.

With the exception of a freighter to cover certain peak days, the introduction of Manannan has given us the ability to be largely self-sufficient and allowed us to cope with the huge peak demands the TT event places upon us. We will continue to monitor the situation and do not rule out chartering other passenger vessels in future TTs if demand justifies the additional capacity. TT 2010 is already on the horizon. Provisional bookings can now be made on a deposit only basis for TT 2010 – as I write many have already booked for next year.

As many of you will know we appeared once again before the Select Committee last week to answer further questions specifically about our accounts and true net profitability. I hope that this will clear up some of the misconceptions. We need now to get on with the ‘day job’ and concentrate on improving further the passenger experience.

The introduction of Manannan is a central plank in our desire to lift the level of service we are able to give to our passengers. She has been enormously well received and even those who ordinarily struggle to find a good word to say about the company have had to grudgingly admit that we now have a vessel to be very proud of.  I have included some shots of her interior below to illustrate the quality of her passenger accommodation.

The introduction of Manannan benefits not just the Steam Packet but just as importantly the Island. It says to the outside world that the Isle of Man is open for business and has a high quality lifeline transport infrastructure necessary to support its offshore finance centre status.

We are planning to hold an open day on Tuesday June 23rd, post the TT period.  The event will be confirmed shortly and will last for a couple of hours. I do hope that as many of you as possible will come for a look round and see for yourselves the huge step forward that Manannan offers in terms of passenger comfort and facilities.

For those of you who may be interested, there will be a ‘Round the Island’ trip on Manannan on Tuesday 30th June and another with Ben-my-Chree on Saturday 15th August.

I expect both will be a highly agreeable way in which to view the coastline of our beautiful Island!

Bye for now

Mark

25 May 2009

Good afternoon

It’s been a really busy fortnight since our new fast craft Manannan arrived in Douglas. We have been training crew, satisfying marine authorities and putting the finishing touches to the passenger areas ready for her entry into service.

We have journeyed Manannan around the Irish Sea to check berth fits and generally show her off. While there are some modifications to various facilities we plan to make in the coming weeks, all is pretty much as was expected from drawings and paper trials.

I have had many positive comments about Manannan. When she arrived in Douglas last week the weather was perfect with a bright blue sea and sky. As one passenger wrote in an email to me “you should have had an ice cream van on the head road this evening you would have recouped the cost of new boat. She looks great in the flesh. I had a look at various other Incats about her size and they look like double deck buses…..she looks more like a super yacht”.

Of course it is pleasing that the reaction to her arrival has been every bit as positive as we had all hoped it would be. We held a reception on board last week for our Manannan Executive Club members, and once the timetable post TT has quietened down we intend to hold an open day for any members of the public that wish to have a look round too.

Last Friday evening she was officially renamed by Mrs Mary Cringle JP, wife of the President of Tynwald, and welcomed also to the Manx shipping register. She now proudly wears Douglas on her transom as her port of registry. Mrs Cringle unveiled a plaque which will be displayed on board for all to see.

Earlier in the day she completed her first return crossing to Liverpool, managing a crossing time of 2 hours and 20 minutes. That in itself is significant and much quicker than our existing fast craft Snaefell who has been averaging around 2 hours 40 minutes. This additional speed, as well as comfort and on-board facilities are very good news for Island residents and visitors alike. We now have a fast craft that is the equal to if not better than anything else around the British Isles.

This is further proof of the benefits of the User Agreement between the Government and this company and is a clear statement of our desire to provide the highest possible standards of service and facilities for our passengers.

That’s all for now.

Mark

08 May 2009

Good afternoon,

Well the weather at the beginning of May has not been kind. We have already had some very strong winds, well in excess of 40mph. As a result we have had to cancel some fast craft sailings which is unusual for the month of May. The BBC/Met Office long range forecast is hedging its bets at the moment although it says there are signs of better weather from mid month. The TT is of course fast approaching - good weather makes the event much more enjoyable for all, not just in getting here, but also for getting out and about our beautiful Island. TT motorcycle bookings remain ahead of those last year at this stage so lets hope the weather does improve and help make this years TT a very enjoyable festival for all.

Our new fast craft Manannan will be here on Monday at midday – I hope there is a reasonable turnout to witness her arrival in Douglas Bay. We had originally planned for her to arrive on Saturday but bad weather was forecast and we felt this would compromise some of the testing and other work we needed to do, taking advantage of the long journey to the Island. This needs to be done in relatively calm conditions and 4 to 5 metre waves en-route are forecast over the weekend.

There will be representatives on board from specialist contractors, interior fit-out and other equipment suppliers. These contractors will be carrying out various essential set-up work on engines, bridge equipment, waterjets and ancillary equipment, as well as more mundane issues such as  dealing with vibrations, rattling deck heads, adjusting seats and so on which are only apparent when at sea under load.

Our Marine Manager, Captain Kane Taha will be taking command of Manannan for the return voyage, and has promised to ensure that there will be some photo opportunities as she comes up the Manx coast. The journey time will be approximately 18-24  hours depending on sea conditions and other factors. The distance to be covered is 481 nautical miles. En-route Manannan will also take part in some aerial filming for brochures and publicity shots.

Manannan is due to carry out her first passenger sailing on the 22nd May. On the same day there will be a formal Re-Naming ceremony over which the wife of the President of Tynwald, Mrs Mary Cringle JP has kindly agreed to preside. We will also be holding a private viewing evening for members of our Manannan Executive Club as well as an open day for the general public. We will advise dates for the open day shortly.

That’s all for now

Mark

24 April 2009

Hello and good afternoon,

I have just returned from Portsmouth where I have been discussing the completion of the Manannan project. As I know many of you are following her conversion closely, I have included an up to date photo of Manannan’s exterior. This was taken while she was turning in the wet basin in Portsmouth this week – it was necessary to turn her so that we can complete some remaining work on her port side.

She is now almost complete, and waiting only for the last remaining bespoke items to arrive. These include things such as a new balustrade for the Manannan Executive Club lounge and stairwell, aft lounge bar counter and additional new seats and tables to arrive from Australia. All preparation work for these has been completed and once they arrive it should only take 2 or 3 days to have them installed.

As things stand, we are currently planning to leave Portsmouth on Friday 8th May in order to arrive in the Island around lunchtime on Saturday 9th May. We may also try and arrange a public open day sometime after her arrival – more on that will be announced later this month.

I would like to remind you that our in house tour operator Steam Packet Holidays have a interesting range of great value trips and packages, both to and from the Island.
  
Going off Island, we have day trips to theme parks/shopping outlets/flower shows and air shows with prices starting at an amazing £44 for a great day out. We also have day trips to some of the best golf courses in the North West of England, with all-inclusive prices from £95.

If you are looking to stay a little longer then Steam Packet Holidays have competitive rates with over 1,100 hotels throughout the UK, Ireland and the Isle of Man, with one night breaks starting at just £62 per person (which includes both ferry and accommodation) – extremely good value for money!

Have a look at Steam Packet Holiday's Special Offers page  for more information.

Our special day trip excursions have already sold well for the legs into the Isle of Man from both Whitehaven (Wednesday 19th August) and Fleetwood (Tuesday 18th August) – we still have space available for Manx residents who want a day trip to either of these destinations. We also still have space on an unusual day excursion from Belfast to Peel on Saturday 25th July, using our fast craft, Snaefell.

You may have read that we will be self-sufficient in terms of passenger vessels for the first time in many years at TT 2009. This of course is because of the additional capacity that Manannan will give us. Notwithstanding this, we have still taken the decision to do precautionary additional work on Viking so that she is available as a back up vessel during the event. This represents a considerable (and many would argue in purely commercial terms, unnecessary) investment by the Steam Packet in ensuring a positive contribution to the event.

That’s all for now

Mark

14 April 2009

Good afternoon

It was a very pleasant Easter weekend and the weather was kind both for sailings and for the many sporting events held around the Island. It is always good to see so many families travelling over the holiday period.

Passenger numbers for this years TT are slightly up at this stage compared to the forward bookings  for TT 2008 at the same point last year. If  bookings continue at the same rate as we experienced last year we expect that there will be around a 5% increase in motorbikes. That will mean there will be about 10,000 motorbikes descending on the Island at the end of next month!

This is a credible result given the economic situation and reflects the ongoing popularity of the event. We are once again operating a scheme to give a discount to accredited marshals who travel to both the TT and the MGP. This has proved a useful tool in attracting additional volunteers to marshal, without which these events simply would not happen.

We are beginning the final preparations too in order to welcome Manannan to the fleet. Most of the construction phase has now been finished and we are waiting for the  contractors to complete the interior fit-out too. Interior bulkheads, carpets and finishings are currently being installed. The last item to be fitted will be seats which are en-route from the manufacturer in Australia.

We are now provisionally assuming a service start date of 22nd May, two weeks before TT Race Week. Before we can bring Manannan into service we have a long and challenging programme ahead of us – this includes crew and terminal training, statutory certification, and berthing trials around the Irish Sea. We also have to satisfy the regulatory authorities in each of the jurisdictions (England, Ireland and Isle of Man) that the vessel is fit for service in every respect and the crew properly familiarised.

I have included a before and after photo of Manannan to illustrate what has been achieved in transforming her into the very fine vessel that will be arriving in Douglas harbour in the near future.

There are also some pre-Easter shots of interior work. These show clearly the progress on fitting out, as well as detail of the new bar area in the aft lounge, outside deck and ‘sky lounge’.

Our passenger numbers for March were, as expected, down on the same month last year due to the fact that Easter fell in April this year. Initial numbers show a decline of around 15,000 passengers in the month of March. However, our forward bookings suggest that the numbers travelling in April this year should be up by  a similar amount on last April. Overall the March/April period taken as a whole should be broadly similar this year to last.

That’s all for now.

Mark

30 March 2009

Good morning

Fast craft services resumed last Friday with Snaefell starting the season. Manannan will join her in May meaning that once again we will be operating two fast craft through the peak summer season. This represents a firm commitment by the Company to provide the best possible service and widest possible choice for our passengers at a time when many other companies are reducing services and closing routes.

Passengers will also experience new facilities in Liverpool. The car check-in area is now on the left hand side of the road approaching from the city, not on the right as was previously the case. Foot passengers check-in inside the new passenger terminal located down on the landing stage. This is accessed via a walkway down the new bridge adjacent to the car check in area. This bridge is much longer than existing bridges and will mean that the slope is not as steep as has been the case at very low tides in the past. This will be of benefit to those elderly, infirm or disabled passengers There are signs in place and there will also be staff present to assist foot passengers. The baggage reclaim facility will now be located on the landing stage, and there will be a conveyor system to assist passengers with luggage up the bridge to the shore.

As expected, there was a limited reaction in the press and other media to our decision to make all fast craft non smoking vessels. We remain firmly of the belief that this will benefit the vast majority of our passengers who do not smoke. Fresh air, even at speed on open decks of fast craft is not fresh at all if accompanied by exhaled cigarette smoke from others. Crowded doorways and the associated litter and fire hazard from smokers who will not use the receptacles provided combine to make the experience unpleasant and potentially unsafe for those who do not smoke. That is why we have taken the decision to implement the no smoking  policy on fast craft only this year.

We do operate a ‘Zero Tolerance’ policy which forms part of the contract entered into between the company and passengers when a ticket is purchased for travel. Details can be found by clicking on the following link and scrolling to the bottom of the page: http://www.steam-packet.com/SteamPacket/Terms-And-Conditions/

Fast craft have fire and smoke detection systems fitted throughout the passenger accommodation and toilets. These are necessarily extremely sensitive and passengers should be aware too that any attempt to smoke anywhere inside the vessel will be treated with the seriousness commensurate with endangering the safety of the vessel, its passengers and crew.

Manannan is expected in the Irish sea next month. Latest pictures below show the extent to which work has accelerated. Logos are now in place as is her name. The new vehicle ramp at her stern is attached and will be commissioned shortly. Her AIS signal is now live and ferry enthusiasts have already commented on her being visible bearing her new name and port of registry. The interior once again looks like a ship and carpets and seats are being installed. The galley on board will have capabilities more akin to those of the Ben-my-Chree than other fast craft. The upper deck area has a new widened staircase giving access to the Manannan Executive Club. There is an additional staircase midship giving access to the Manannan Premium Lounge and reserved seating area.

That’s all for now.

Mark

 







18 March 2009

Good morning

Manannan has been a central focus of Steam Packet efforts in recent weeks. I understand that work on Manannan is in fact the largest conversion project ever undertaken on an aluminium fast craft. I have included quite a few photographs in this blog - they will give a clear idea of the progress on external and internal fit out and were taken a couple of weeks ago. The photos show both new passenger lifts as well as other internal and external views.

Before her entry into service in May we will carry out a full programme of berth-fit, crew training and familiarisation programmes. We will also have a formal launching ceremony and maybe also a visitor open day before we get into the TT period. Keep an eye out for dates on this blog.

Snaefell will return to Manx waters later this week. We have spent a considerable sum of money during the winter period and have completely refurbished all toilets on board. I hope you will notice the difference. We have also upgraded the Manannan Executive Club lounge and carried out some other minor improvement works. We are now only a couple of weeks away from the start of 2009 fast craft services.

During the sumer period it is our intention to do both a Manannan and Ben-my-Chree ‘round the Island’ trip. Dates will be advertised as soon as we can finalise details.

There are a number of summer day excursion ‘specials’ too. The Fleetwood sailing (18th August) is already sold out on the inward leg, sailings from Whitehaven (19th August) and Belfast (to Peel on 25th July) are booking well. We have now put on an additional Fleetwood sailing on 20th June. There are also a number of day trip opportunities to Dublin in July (on 6th and 19th) as well as on August 31st.

For the 2009 season it has been decided that all fast craft sailings (both Manannan and Snaefell) will be exclusively ‘no smoking’. This is because of the limited outside deck space available on fast craft. Ben-my-Chree will continue to offer an outside area for smokers.

I am pleased that our passengers numbers in February held up well. Despite the tough economic conditions. Further evidence I believe of the value for money fares we provide. We do expect a dip in year on year passenger numbers in March because Easter falls later this year. We have also scheduled an additional sailing of Snaefell at Easter (9th April) to provide additional capacity at this busy time.

Even allowing for this increase our average load factors remain low at only 25% in January, and 31% in February. Comment has been made that our average year round load factors of under 40% are low - I agree. This is a direct result of the requirement under the User Agreement to provide substantial frequency and capacity year round - even when there is little demand.

We have successfully grown average passenger demand levels over the last decade or so, however there is a limited number of visitors which can be sustained during the winter months by Island infrastructure and amenities. Latest TV advertising campaigns for the Island have showcased what the Island has to offer and I hope that these will translate into substantial new visitor demand.

That’s all for now.

Mark


 

09 March 2009

Good morning 

Fuel surcharges have now been reduced on freight traffic. This means that on average the cost of shipping per lane metre has reduced by between 6% and 8% depending on traffic type. This is a significant amount. It will be interesting to see if this is passed on by hauliers to their customers – and if as some may believe, that this will in turn lead to lower prices in the shops. In practice I suspect this will not happen. Partly because of common pricing policies operated by some of the major retailers, partly because some hauliers may simply use reduced fuel surcharges to improve their own profitability.

The Chairman of the Select Committee has stated that if the fuel surcharge for freight can be cut, there should be a ‘significant’ reduction for passengers too. If fuel prices remain at present levels, or fall further then I expect there would have been a consequent fall in the passenger fuel surcharge at what would have been the next scheduled review in September.

However, without recognising the high proprortion of additional fuel costs borne by the Steam Packet, the select committee have surprisingly recommended that the DoT give notice on the current agreement. As a result, there will be no review under the existing model in September.

Instead, with effect from June, there will either be a new fuel surcharge agreed, or no fuel surcharge agreement at all. If the latter, we would be free if we chose to pass on all our additional fuel costs, not just a proportion of them as at present.

The end of February is when payment has to be made for TT bookings. As such it is a good indicator of likely TT visitor numbers. This year it’s no surprise given world economic conditions that numbers are down. Any cancellations as a result of the deadline for payment will mean that some space will become available on peak sailings. These will be bookable from March 10th so good news for anyone looking for a late place on some peak sailings. 

Progress on Manannan is very good and its entirely new interior fit-out is well underway. Final external livery and logos will shortly be applied. Facilities on board will include a mix of reclining, aircraft type and table seating. There will be a new shop, bar and full galley facilities. There will also be a childrens play area and two cinema lounges. The top deck will be devoted to the Manannan Executive Club lounge, Manannan Premium lounge and reservable seating. Each deck will have access to an outside area. 

Work continues too in order to complete the facilities in Liverpool for the commencement of the fast craft season. We have now vacated the old land based terminal and invested in a new building for passengers on the Landing Stage. There will be improvements too in the form of a conveyor system to assist passengers with their luggage up the ramp to the road. This can be very steep at low tides so this will be a great benefit to passengers.

That’s all for now.

Mark

27 February 2009

Good afternoon

There is much talk again about fuel costs and fuel surcharges.

The scheduled review for March 1st has resulted in a reduction in freight but not passenger surcharges. This is because at the last review, the surcharge model dictated that most of the increase was borne by freight.

The Manx Independent today in their ‘Our View’ column have perhaps understandably attempted to take credit for this reduction.  As for their musing about reasons for the reduction, they should be perfectly aware that a 6 monthly review was scheduled for 1st March (and 1st September) just as it has been every year since its introduction!

The fuel surcharge agreement is based on a mathematical formula - if fuel prices increase, surcharges will too. If they decrease, surcharges will follow suit. No great surprise then that the surcharge has reduced.

So in case some are wondering,  the reduction is nothing to do with select committee recommendations, political pressure or media stories - it’s the result of a pre-determined formula agreed several years ago with government.

In my last blog entry I posted details of fuel costs and surcharge reclaims over recent years. I make no apology for reproducing them again here as they are crucial to understanding the need for a fuel surcharge.

Fuel costs have increased dramatically in recent years, even allowing for recent US Dollar based decreases.  Fuel costs may have fallen recently, but memories are short – fuel prices are still at historically high levels.

Our prices of course have increased at below inflationary levels over the same period.

The table below shows how the cost of fuel has changed.  It also shows that the Company has absorbed a significant and increasing proportion of the rise in fuel costs.  Fuel surcharges could have been considerably higher if we had chosen to pass on a higher proportion of these costs to passengers.

Year	Marine fuel costs paid by Steam Packet	Amount recovered by Fuel Surcharge	Amount absorbed by Steam Packet	Proportion absorbed by Steam Packet
2006	£3.4m	£1.8m	£1.6m	47%
2007	£4.8m	£2.1m	£2.7m	56%
2008	£9.4m	£3.3m	£6.1m	65%

To stabilise fares, the surcharge is applied in arrears on the basis of the costs in the previous 6 months.  Therefore, there is a time lag before surcharges are raised or reduced.

Only now are we recovering a small proportion of the cost of fuel incurred last summer.

We could review fuel surcharges on a weekly basis and apply a price increase, or reduction, in line with the real-time movement in the fuel price.  However, this would result in fluctuating fares and could mean charging or refunding the surcharge at the time of travel.  Passengers would not know the final cost of their fare until the day they travelled. 

Incidentally, if we had chosen to do this, fuel surcharges would have increased steadily throughout last summer - as it is they did not rise at all.  That is why it is right and fair that these surcharges are still being applied.

Now some complain that surcharges have not fallen as rapidly as fuel prices (ignoring of course the delay imposed on us by the agreement with government) - interesting that these same people were not beating a path to our door to insist that prices should have been immediately increased last summer to reflect rapidly escalating  fuel prices!

Because of the select committe recommendation, the existing surcharge agreement will end in May.  Beyond May, higher fuel costs already incurred will still need to be recouped either by a new surcharge mechanism or by higher fares.

This is why we did not agree with the select committee recommendation to cancel the existing fuel surcharge agreement - the net result of which may be to pass more of the burden onto passengers and freight.

Turning now to our new fast craft, Manannan. It is pleasing that most of the heavy duty structural work has been completed. Internal fit-out is now well underway. Work has begun on both the passenger lift from the vehicle deck as well as the internal lift between the main deck and sky deck. New livery final coats are being applied and she is really now starting to look like the fine vessel we know she will be.

Manannan has been re-flagged from the Bahamas and will now proudly display her port of registry as Douglas in the Isle of Man. I have enclosed some photos taken only a week or so ago for those who may be interested.

That’s all for now.

Mark

19 February 2009

Good afternoon,

There has been much in the press recently about the Steam Packet Company fuel surcharge, the Select Committee re-forming and OFT investigations. We did provide a full statement for the press – this included cost of fuel and fare comparisons. The press chose to leave these key balancing arguments out of the articles that were run. I suppose it is difficult to run a headline about the Steam Packet company ‘ripping off’ passengers if in the same article you acknowledge that fuel costs have risen by £3.4m (even after taking into account the amount recovered by fuel surcharges) and yet passenger fares have remained unchanged.

The table below details fuel cost since 2006:

Year	Marine fuel costs paid by Steam Packet	Amount recovered by Fuel Surcharge	Amount absorbed by Steam Packet	Proportion absorbed by Steam Packet
2006	£3.4m	£1.8m	£1.6m	47%
2007	£4.8m	£2.1m	£2.7m	56%
2008	£9.4m	£3.3m	£6.1m	65%

It is worth revisiting exactly what the User Agreement is and what it does for the IoM. The User Agreement is a contract that was sought by the IoM government, not the Steam Packet, back in 1995 against a background of failed Manxline competition, service disruptions and seafarer strikes. It was intended to secure sea services and provide a frequency, diversity and stability of vital lifeline services.

Back in 1995, nobody knew what the future held. The Steam Packet were forced to accept an agreement that not only obliged us to use a newly built government linkspan (and also to pay for its construction costs and annual maintenance costs of around £250k per annum), but also charged us around £150k a year to continue using our own linkspan in Douglas Harbour. This is in addition to the harbour and freight traffic dues we pay to government of around £3m per year. It also commits us to heavy investment going forward in addition to the £80m already spent.

So under the agreement we are paying not just to use the harbour facilities but also the cost of building and maintaining the new government owned linkspan as well as a charge to site our own linkspan in Douglas Harbour. In return for this we were given near exclusive use of the government linkspan.

Under the agreement approved by Tynwald in 1995 as amended and approved again in 2002 and 2004 our prices were benchmarked. They have been capped at Manx RPI less one half a percent since 1995. The weight of challenge under the newly signed  agreement was very much on Steam Packet to perform. As well as price controls and charges above, we were also obliged to guarantee minimum frequency, diversity of routes and capacity many of which were and still are uneconomic.

Whether we like it or not, the IoM is a natural monopoly in terms of shipping services because of its size – and we should stop trying to pretend otherwise.  The simple fact is that we need a certain minimum level of revenue to cover the cost of operating the many unprofitable services we are expected to provide under the agreement as well to cover the cost of ongoing investment. The select committee recommendation to cut freight charges fails to recognise that these are absolutely central to their own finding that passenger fares are ‘very competitive’. We have made it very clear that freight charges considerably subsidise passenger fares and services. In a free market many of these services simply would not be operated. They don’t make economic sense.

The select committee has now been re-formed and were given our 2006 and 2007 accounts yesterday. We do hope that we are given the chance to correct the errors and ommissions contained in their report. We would welcome the opportunity to set the record straight.

That’s all for now.

Mark

6 February 2009

Good afternoon all.

It’s been an interesting week, with the Ben-my-Chree delivering some unusual cargo to the Isle of Man.

Around 800 hay bales were transported from Heysham this week. The square hay bales were not available in the Isle of Man. Without them, the Southern 100 could not take place so we were more than happy to support the Southern 100 Motorcycle Racing Committee in bringing the hay bales over. This is only one of the many ways in which we assist local events.

Frustratingly the Steam Packet Company is being used yet again as a political ‘football’. Some people seem to forget that the company is actually comprised largely of Manx resident workers. Many of these staff have expressed their utter frustration at the many inaccurate statements made in the press and in Tynwald.

It is easy to forget the benefits that the agreement between the Government and the Company has delivered since 1995. That is, stability and frequency of service, prices increases that have been capped each year at 0.5% below Manx RPI and steadily improving passenger satisfaction with service standards. Overlooked too is the huge investment in our fleet and facilities over the same period.

With an average load factor of under 40% year round, we are providing enormous capacity and frequency that has to be paid for. Elsewhere this is provided by taxpayer subsidies of many tens of millions of pounds - but not here. The cost of transport can be reduced but only by cutting out unprofitable sailings and routes, and by increasing load factors on each sailing. 

Many of our fast craft services for example do not even cover their own direct costs yet these services, provided under the User Agreement, have been instrumental in growing visitor numbers to the Island at a time where many other communities have suffered falling numbers. A minimum of two daily trips in each direction is something we have become used to but would not be provided if there were no User Agreement. Food for thought.

Enjoy your weekend and the snow, should we see any more!

Best wishes

Mark

27 January 2009

Good afternoon all.

I’m pleased to report structural work on Manannan is now nearing completion. Once done we will have the ‘blank canvas’ ready for the internal furnishings, décor and seats. Coupled with the full external livery yet to be applied, she will make a fine sight in Douglas Harbour. We are all looking forward to her joining our fleet in May. Plans are underway to properly welcome her and we will keep you updated on these.

This week I’d like to welcome a new member to our team. Duncan Jude joined us in the new year as Chief Financial Officer. Duncan moved to the Island in 1985 where he qualified as a Chartered Accountant before joining a local ship management company.

I am delighted Duncan has joined us. He is a highly motivated and experienced individual and I am sure his contribution to the business will be invaluable going forward.

The Steam Packet sailings brochure has been available since the start of the year. For the first time this year we have also produced a printer friendly version on the website which users can download and which is proving very popular. The Steam Packet Holidays brochure will be out later this week with a wide range of great value short breaks to the UK and Ireland so be sure to look out for it.

For TT 2009, we will be also offering daytrips from Heysham and Belfast – for details please contact our reservations team. These are timed to allow a full day on the Island on scheduled race days and we hope they will prove popular.

That’s it for now.

Best wishes,

Mark

20 January 2009

Good afternoon to everyone,

It has been a difficult week or so for both Isle of Man Steam Packet Company staff and passengers with very unsettled weather affecting our sailings.

The weather seems to be showing no signs of calming down with gale force winds causing disruptions to our timetable over the last few weekends. The period ahead is looking unsettled too. As usual, we endeavoured to contact everyone affected by the changes and I hope we achieved our aim to minimise any inconvenience to our customers.

I am pleased to report that the Ben-my-Chree is back with us, following her spell in dry dock to repair the damage sustained early last year when her propellers encountered fishing gear.

In fact, she is back on top form after braving the gales over the weekend and sailing to and from Birkenhead in some challenging conditions.

On a more positive note, plans are underway to welcome Manannan to our fleet. I have included some recent photos of progress for those who may be interested. These show the newly created larger sky lounge, the new aft passenger lounge and the soon to be re-furbished main passenger lounge.  In addition, there is an exterior shot of the new superstructure now largely completed. As can be clearly seen, the entire interior of the vessel will be new when completed.

Her refit is going well and we are looking forward to marking her arrival with a whole host of events.

We will keep you informed as plans for the special events progress.

There have been a few questions regarding fuel surcharges recently, and I think it is worth taking the time to clarify the situation regarding these.

The Isle of Man Government regulates the fuel surcharges, by reference to the fluctuating costs incurred.  We apply fuel surcharges in arrears, based on the actual costs incurred in the previous 6-month period, so there is a time lag before surcharges are increased or reduced. However, the level of surcharges will automatically and (most importantly), fairly reflect any sustained increase or reduction in fuel costs. We review the fuel surcharge in March and September each year. This means we are partially recovering high fuel prices incurred between March and September last year, only now in the 6-month period to March this year.

That’s all for now,

Mark

9 January 2009

Good morning all.

I hope you enjoyed the Christmas festivities and I’d like to wish everyone all the best for the year ahead.

It’s been a somewhat frustrating start to 2009 for the Company, with the Ben-my-Chree forced to make an unscheduled trip to the dry dock to undergo repairs due to damage sustained early last year when her propellers became entangled in fishing gear.

Unfortunately, we have been forced to alter the timings of the dry-docking not once, but twice – and hence our contingency plans have had to be altered on more than one occasion, too. The Ben was initially scheduled to go into dry dock on Tuesday of this week, but will now enter today, with the Viking coming out of ‘retirement’ to perform the Ben’s services until she returns for the 08.45 to Heysham on Tuesday.

The nature of dry-docking facilities and ship maintenance is such that repair schedules are subject to change and we do not have control over the availability of the required facilities. We also now have to contend with adverse weather conditions.

Full details of the enforced changes to the schedules continue to be released to the media and updates are available on our website. We are also endeavouring to contact all passengers with bookings, but I can appreciate the frustration felt by those who have had their travel plans disrupted this week.

On a more positive note, good progress is being made with our new vessel, Manannan, which is being refitted in Portsmouth. The Company is making plans to mark her arrival in Manx waters and for her first scheduled sailing on May 1st, and we’ll keep the public informed about special events we have lined up.

All the best,

Mark