BC Ferries cuts daily losses to $1 million amid sinking revenue
Demand is increasing on some routes after months of reduced travel due to COVID-19
The president and CEO of BC Ferries is hoping that increased travel on the ferry system over the next 12 to 18 months will help put it back on firmer financial footing.
"If conditions normalize, we can get some traffic back on the system over the next 12 to 18 months, I think we will come out of it in fairly good shape," said Mark Collins on CBC's All Points West.
"We carry on."
Traffic is down substantially for the corporation: there was a 92 per cent drop in passenger travel during the Easter long weekend, for example, compared to 2019.
The corporation has resumed service on previously shuttered routes because demand is slowly increasing and moving passengers and goods deemed essential remains a priority.
Collins said the corporation is losing around $1 million a day, slightly better than in mid-March, when it was losing around $1.5 million a day.
"The costs have remained because the ships are still there, the terminals are still there. But the demand, the revenue has gone away," Collins said.
On Wednesday, DBRS Morningstar, a global credit rating agency, classified BC Ferries' credit rating at A (high), but revised the company's overall trend from stable to negative, due to impacts from the coronavirus.
Collins said that classification wasn't entirely unexpected, and one that many other corporations are facing around the world as the pandemic drags on.
"If it were to stay that way in the long term, it would have an impact on our borrowing costs, which are substantial," he said.
So far, the corporation has relied on borrowing to get them through the rough patch.
"We will be carrying some extra debt [but] that's how you get through these crisis. You have to spend your reserves to get through," he said.
But the increased debt eventually has to be repaid. Whether this translates into increased fares for passengers down the line, Collins says it's too early to say.
At a press briefing Wednesday, Premier John Horgan said he has been busy building alliances with the other Maritime provinces who also have publicly funded ferry systems to make a pitch for federal government assistance.
However, he also said a bigger priority is working to get federal help for the province's public transit systems — TransLink and BC Transit.
"We see where we'll go on transit. Ferries is another challenge for another day," Horgan said.
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With files from All Points West