Wightlink’s pledge to help travellers

By Richard Wright

Friday, November 16, 2012

 

Wightlink’s pledge to help travellers

Russell Kew.

WIGHTLINK this week issued a detailed response to mounting criticism of its service and jobs cuts.

The open letter from chief executive Russell Kew detailed the result of a review the ferry company put in place as a response to travellers’ complaints.

He repeated that in the current economic climate the company had to take action to protect its routes and staff.

"We are committed to operating a 24-hour service on our Portsmouth-Fishbourne route," said Mr Kew.

He said the company was aware of the effect timetable changes had on individual passengers and never took decisions lightly.

"But the entire shipping industry is facing rising fuel costs, with prices having nearly trebled in the last three years.

"Wightlink, like other operators, trains and airlines, operates a 'yield management’ system, reducing prices when demand is low in order to encourage a more even usage of the service, with peak-time prices inevitably higher.

"Despite this, over the past 20 years the price of a day return ticket has risen just 26 per cent, with RPI over the same period being 81 per cent.

"Islanders enjoy a significant 30 per cent discount on prices, and multilink car tickets have risen below inflation in recent years," said Mr Kew.

He said the company would continue to run thousands of unprofitable sailings as part of its commitment to Island life.

He outlined a series of Wightlink responses.

•A free taxi phone to be installed at Gunwharf car ferry terminal for foot passengers to arrange taxis to meet them at Fishbourne.

•A review of the walking route between Portsmouth Harbour railway station and the Gunwharf terminal with Portsmouth City Council, including providing maps, reviewing lighting and signage.

•Additional sailings, including overnight, during the Isle of Wight Festival and Bestival.

•A new 'group charter’ system for customers to request an additional early or late sailing on the Portsmouth-Ryde route for special events.

•New ways, to be announced soon, in which customers can provide the company with feedback about services and the future of the business.

See Mr Kew's full letter below, along a response by marketing manager Kerry Jackson to County Press readers who questioned Maquarie's arrangements:

Russell Kew

CEO Wightlink

"Wightlink welcomes the opportunity to reply to the concerns expressed by some of our customers about the changes announced recently. I have reviewed these with my fellow directors and, where we can, we are putting in place arrangements to minimise the impact of the timetable changes we are introducing.

"Let me begin by recognising that we provide a lifeline service and want to provide as many sailings as possible. However, particularly in the current economic climate, the company has to act responsibly in the face of very low levels of utilisation in order to secure the future of its services for the benefit of passengers, and to protect sustainable employment for our staff. The sailings we are removing operate, on average, 93 per cent empty for foot passengers and with vehicle decks 80 per cent empty. The affected catamaran sailings are even more poorly used.

"However, even after these changes, we will provide more than 50,000 sailings a year across our three routes to meet the needs of the overwhelming majority of our customers. We are also committed to operating a 24 hour service on our Portsmouth-Fishbourne route.

"I know that individual customers rely on individual sailings and that particular sailing times are convenient for different customers. Timetable changes are never made lightly, and are done having reviewed many months of travel patterns and in light of practicalities such as crew shift patterns, vessel fuelling and other public transport links; customer feedback is always a consideration.

"Customers are understandably concerned about price and we are working hard to keep prices as low as possible; these timetable changes are an important part of this. The company is facing steeply rising costs, with fuel and staff costs running ahead of inflation. As was reported on BBC South Today earlier this week, the entire shipping industry is facing rising fuel costs, with prices having nearly trebled in the last 3 years.

"Wightlink, like other operators, trains and airlines, operates a 'yield management’ system, reducing prices when demand is low in order to encourage a more even usage of the service, with peak time prices inevitably higher. Despite this, over the past twenty years the price of a day return ticket has risen just 26 per cent (with RPI over the same period being 81 per cent). Islanders enjoy a significant discount (30 per cent) on prices and multilink car tickets have risen below inflation in recent years. We will continue to run thousands of unprofitable sailings as part of our commitment to be part of Island life, but, by removing a small number of the most under-utilised sailings, we will help to protect customers from the impact of the cost increases which the business is facing.

"Let me now explain the actions we will put in place to respond to specific customer concerns.

"Some foot passengers have stated that it will be inconvenient for them to take the car ferry to Fishbourne, because there are no taxis there. To address this, a free taxi phone is being installed at our Gunwharf terminal so that foot passengers can arrange for a taxi to meet them at Fishbourne. We will also be reviewing the walking route between Portsmouth Harbour railway station and the Gunwharf terminal with Portsmouth City Council, including providing maps, reviewing lighting and signage.

"The company does a great deal to support the development of the Island’s economy, including investing c.£1.5m per annum in promoting the Island and supporting Island events, and as a key player in the new Destination Management Organisation launched yesterday (Nov 15). We also respond to seasonal demand, and for example we will be providing additional sailings, including overnight, during the IW Festival and Bestival.

"Wightlink is also introducing a new 'group charter’ system whereby customers can request an additional early or late sailing on Portsmouth-Ryde for special events.

"Unfortunately, however, there are some things which we cannot change. The company has reviewed whether, on Portsmouth FC match days, it could re-time the 22.15 Portsmouth-Ryde sailing to 22.30 in order to accommodate fans. However, this service connects with the 22.45 train from Ryde Pier, and we believe it would be inappropriate to inconvenience other passengers by making them miss this connection. We will be pleased to liaise with supporters’ groups regarding our new 'group charter’ system for match days.

"Some passengers asked if we could add in one (or more) sailings at the beginning or end of the day which are of particular value to them. Sometimes it is possible to add in additional sailings, particularly if they sit within existing shift patterns. But, at the beginning or end of the day, it is often not possible to do this because, if a shift is already at its maximum duration, adding just one more sailing could mean adding a full shift for a full crew. In most circumstances this would not be viable.

"I would also like to reassure customers that the emergency services have been kept fully informed of our plans.

"Finally, I will shortly be announcing a range of new ways in which customers can provide the directors with feedback about our service and the future of the business. I hope this will lead to a new era of constructive dialogue between Wightlink and its customers."

Kerry Jackson,

Wightlink marketing manager.

"These changes are being made because of the challenges faced by the company in the current difficult economic climate, and in order to secure the future of our service for the benefit of passengers and staff. They will put the company on a sound financial footing for the future.

"Macquarie European Infrastructure Fund made a significant investment in Wightlink. It used both equity and debt in making the original investment and ongoing capital programmes. Meanwhile the impact of the economy on traffic has affected Wightlink’s revenues, but the debt supporting the investment still needs to be serviced like any loan. The changes aim to make the business sustainable, including being able to service our debt. Importantly, they also support a sustainable timetable for passengers, employment for staff and the continued programme of investment in the business.

"These changes are not about achieving a particular level of profit, they are about ensuring the long term sustainability of the business. Of course, profit is important; any business needs to balance the interests of its staff, customers and shareholders. We believe these changes achieve that.

"Wightlink makes a 7.5 per cent Return on Capital Employed (ROCE) which the OFT confirmed in its report is not an unreasonable return. Wightlink has demonstrated its commitment to the Island by investing over £50m on new ships and shore infrastructure (on the Lymington-Yarmouth and Portsmouth Harbour-Ryde Pier Head routes) in the last five years. Going forward, we have to be able to attract funding to replace ships on the Portsmouth to Fishbourne route, ensuring the business remains profitable and able to attract investment is crucial to the economy of the Island and to the residents and also to Wightlink."

Reporter: richardw@iwcpmail.co.uk

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