Molokai ferry wants to operate ‘as needed’

WAILUKU >> Sea Link of Hawaii withdrew last week its petition to reduce its twice-daily ferry route between Molokai and Maui and intends to submit a new petition to run the ferry only on an “as-needed” basis, according to company President and Senior Capt. Dave Jung.

“We’re looking to be a common carrier with a minimum number of passengers,” Jung said by phone Wednesday. “It’s just too difficult running a fixed schedule.” He said the ferry would still “be able to take care of high school teams and peak periods, but running on a rigid schedule doesn’t make much sense.”

He said he intends to submit the new petition to the state Public Utilities Commission next week, The Maui News reported Thursday.

Sea Link of Hawaii had filed a petition in March to reduce service to one round trip per day; berthing overnight in Lahaina instead of Kaunakakai; and making the Sunday voyage optional. But Jung said those concessions would not be enough after Makani Kai Airlines announced earlier this month it would be adding six daily round-trip flights between Molokai and Maui starting June 1.

The airline is offering promotional rates of $39 one way for flights booked before June 30 for travel by July 31.

“This new air service will severely and detrimentally impact Sea Link’s water carrier service,” company attorney Judith Neustadter Naone wrote in her submittal to the PUC last week.

Because airlines are not regulated by a state agency, they are able to offer cheaper fares between the islands and discontinue unprofitable routes on a whim, Jung said. He told The Maui News in March that ridership had “plummeted” in the last six months, due in part to competition from ‘Ohana by Hawaiian and Mokulele Airlines, which both offer multiple daily flights between Maui and Molokai.

Jung said he expects the drop in ridership to get worse in the coming months, with Makani Kai jumping into the mix.

“With Makani Kai doing 12 (one-way) trips a day, that’s a lot of seats to be dumping on the market,” Jung said. “We (also) have ‘Ohana Air’s 48-passenger plane, so we have a couple new players that have dumped a whole lot of seats on the market. How are we going to compete against that?”

A one-way trip on the ferry currently costs about $65 and takes one hour and 45 minutes one way from Lahaina Harbor to Kaunakakai Harbor. A flight from Kahului or Kapalua to Molokai Airport takes about 20 minutes.

Even if Jung wanted to lower fares to compete with airline rates, he would not be able to without approval from the PUC, which regulates ferry rates and reviews proposed schedule changes.

A Maui County Council committee tentatively approved on Friday a bill to appropriate $105,000 from the county’s Economic Development Revolving Fund to keep the ferry afloat. The measure goes before the full council for a vote on first reading on Tuesday.

Jung said those funds would allow the ferry to maintain its current schedule and operations until summer, while the company waits for a response from the PUC. He told council members last week that the money would sustain ferry operations until around July 1, but he said Wednesday that “we’re going to string it (the money) out as long as I possibly can.”

The county funds are not a long-term solution to the ferry’s financial woes, but will give “us breathing room while we go through those standard operating procedures of the PUC,” Jung said.

The state Division of Consumer Advocacy submitted a letter to the PUC in April suggesting it hold a round of public hearings on Molokai and Maui “to allow existing and potential customers to provide the commission public testimony on the impacts that the proposed sailing schedule changes might have on them.”

But that process could take well over a year, Jung said.

“At that point, we’d be better off declaring bankruptcy and shut down until we get an answer from the PUC,” Jung said.

Jung said he has hired a new attorney in Honolulu who will hopefully help speed things up with the company’s filings to the state.

“We’ve been talking to them (PUC) since February. We need to know where the money is going to come from. If you’re going to make us run unprofitable routes, who’s going to pay for it? You can’t force a company to run at a loss and bankrupt itself,” Jung said.

While he said he hopes the county, state or another agency will subsidize the ferry service to keep it afloat, Jung said those prospects are slim. He said he’s almost certain that the current twice-a-day ferry schedule will not continue on after this summer.

“This really is an important service . . . if you look at the economic driving machine on Molokai, it’s drying up. If we’re not careful, there will be no sustainable business there,” Jung said. “Molokai desperately needs a ferry system . . . and we’re running on a shoestring.”

The ferry began operations in 1987 at the prodding of then-Gov. Ben Cayetano, who helped subsidize commuter fare with a $30,000 monthly stipend. Those subsidies ended in 1995.

The ferry currently docks at Kaunakakai Harbor, departing from that harbor for its morning run at 5:15 and again at 4 p.m. Monday through Saturday. The boat makes only the afternoon run Sundays.