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News

IOMSPC WILL ENDEAVOUR TO MAINTAIN FREQUENT PASSENGER AND FREIGHT SERVICES

3/11/2010

The Isle of Man Steam Packet Company notes with concern the recent expansion of the lift-on, lift-off service being offered to freight customers by Mezeron.

The User Agreement, under which the Steam Packet has operated for the past 15 years, obliges the Company to offer a full range of passenger and freight services throughout the year with fares which are strictly regulated by Government.

The possibility that, at certain times, one element of the Company’s offering might support other less profitable or even loss making services, is a concept fully recognised within the Agreement. Indeed it is the very basis of the Agreement and the reason for its success over the years.

It was introduced by Government in recognition that, after many years of almost suicidal competition by two companies on the route, a regulated service by one operator was in the best interests of the Isle of Man.

Even though the User Agreement was designed for a single operator, the Steam Packet would be ready to take on a competitor subject to the same obligations as it is subject to – but it is at an immediate disadvantage if it has to compete with an operator who can pick and choose the profitable opportunities and who is under no obligation to provide any other services which might be essential to the Island – but are less profitable – and which can, if things don’t work out as planned, close down its operations as quickly as they were established in the first place.

The Isle of Man Steam Packet Company will do all it can to protect the interests of its valued passengers and freight customers but its ability to do so in the long term will be severely constrained if it cannot retain its revenue from the more profitable elements of its business from which to support the less profitable parts.

Losing freight business to a low-cost and no-frills operation – and the need to reduce its own rates to compete – will inevitably impact on the Company’s other activities, however hard it will try to ensure its core services are protected.

IOMSPC Chairman Robert Quayle said: ‘The Steam Packet has served the Isle of Man and its people for 180 years. During that time competitors have come and gone. In recent years, the freight and passenger services offered by the Company have been such that the Island has been able to depend on its sea transport services and has become accustomed to next day delivery of goods – something unheard of before.

‘In addition, with the reliability of the Ben-my-Chree and the advent of the fastcraft Manannan, there has been significant capital investment in quality of service on the back of the Company’s success. All of this has been achieved without any subsidy from the taxpayer, in marked contrast to so many other British Island ferry routes, and is largely attributable to the User Agreement which has served the Island well.

‘Sadly, if the User Agreement is undermined by the intervention of an unregulated operator which is subject to none of the obligations which we willingly undertake, the range of services offered by the Isle of Man Steam Packet Company may be unsustainable in their present form.

‘However, we wish to reassure passengers, freight customers and Island residents in general that the Company will be doing its utmost to prevent any reduction in quality or quantity in its services; and that we will work closely with our passengers, freight customers and Government, in order to overcome these latest challenges and to protect the interests of the Island and all our stakeholders.’