More On The Latest BC Ferries FOI Docs

AllTheIndependentReportsThatAreFitToHide

IsHahnReallyGoneVille

The FOI request that led to the document dump was generated by Andrew McLeod of The Tyee who led his piece on them with something that we and others have long suspected was sloshing around in at least some of the limbic systems of David Hahn’s loyal apparatchiks:

A 2007 study produced for British Columbia Ferry Services Inc. found the publicly owned company could maximize its revenues by raising regular fares by 75 per cent, if the province’s ferry commissioner would allow such a large hike.

The proposal included charging more at the times when people were most to want to travel, and dropping fares at other times. A more recent report suggests that hike could be made without seriously decreasing traffic levels, a finding disputed by critics who say ferry fares are already too high….

And how much more did BC Ferries’ paid consultants reckon they could have gouged out of us….errrrr….generated in ‘extra revenue’ if the Ferry regulator had caved and allowed them to do so?

Well….

…”The elasticities derived in this study show that there is significant pricing flexibility and that by using time of day, route, trip purpose pricing the overall revenues of BC Ferries can be increased under the caps set by the regulator,” the TEMS report said.

“BC Ferries is clearly in a position to begin to increase revenues by using a flexible pricing policy,” it said. “The overall potential revenue gain for the seven routes studied from using a flexible pricing system is $21.8 million or an increase of 10.8 per cent over the existing fare structure in 2010.”..

But.

As Chris Montgomery of ‘On The Waterfront’ notes after reading the released documents, there was some concern from the consultants themselves about demographics and all that ‘elasticity’ that is required to make this kind of price jacking really work, not to mention the state of the economy…

1. There’s a “major transition” in traffic patterns under way at Ferries. There are demographic shifts and changes in ownership of island properties (meaning a shift from commuting to temporary visits), both of which are complicated by recessions and the after-effects of 9-11. The conclusion: it would be foolish to expect any sort of short-term growth in ridership.

2. Price and ridership really are linked. But the pricing-demand rubber band isn’t as elastic as many people think .

3. Mostly, ridership appears to be linked to the health of the economy in general. With a recession, it falls. With a healthy GDP, it grows…

So if the Hahniacs remaining at BC Ferries were to get their way and were to institute the gouging with the blessing of the ‘new’ regulator, which way do you reckon overall ridership would slide on the major route money-shakers?

By RossK