Interisland shipping company Young Brothers said today that it is in “extremely dire” financial condition and is seeking $25 million in coronavirus relief aid from the state Legislature to continue operating through the end of this year.

The novel coronavirus has led to a 30% drop in cargo volume following the implementation of Hawaii’s stay-at-home orders, the company said in a news release today.

A drop in cargo and tourism has netted the company with an $8 million loss through April, and it projects a $25 million loss by year’s end.

“Until now, our parent company has graciously and generously covered our losses,” said Jay Ana, president of Young Brothers, in the release. Young Brothers is an independent subsidiary of Foss Maritime Company, which is owned by Washington-based Saltchuk Resources.

“But they are not in a position to continue covering the staggering COVID losses and have told us that we must now find other solutions,” Ana said. “We must now find a cooperative solution with the state that allows YB to continue to operate.”

In a letter to the state Public Utilities Commission today, Young Brothers said that its financial situation is “extremely dire,” and it is seeking $25 million in federal coronavirus relief act funds from the state Legislature to continue operating through December.

“Every business in Hawai‘i has been impacted by the COVID-19 pandemic, including Young Brothers,” said Gov. David Ige in an emailed statement. “The company is part of the state’s critical infrastructure that keeps goods moving to and between the islands. We will be considering the request as part of the recovery and resiliency efforts underway.”

On Monday, its parent company said it will no longer be giving it cash infusions. Young Brothers said in the news release that it had covered more than $21 million in losses from 2018 and 2019 as the company pursued rate relief from the PUC.

“The mounting losses at Young Brothers are more than any parent company can absorb,” said Jason Childs, chairman of Young Brothers’ board of directors, in the news release. “We’re in a shared crisis that is far from over and are losing more than $3 million a month. This is not sustainable.”

Subject to PUC approval, modified services could start June 8 if the shipping company doesn’t receive any relief.

“We hope to avoid any disruption in service,” said Ana. “Support from the state Legislature would put the company on solid ground while we seek solutions from the Public Utilities Commission to achieve a more sustainable future for the company. Our goal is to ensure Young Brothers is here to serve all of Hawai‘i beyond 2020 and into the future.”

Young Brothers has already streamlined its services during the COVID-19 outbreak. It reported saving $6 million by reducing service to Maui County and the Big Island, and it has cut gate hours at all major ports. The company also reported hiring freezes and salary cuts and reducing nonessential expenses.

Ana assured neighbor islands that service will continue.

“The neighbor island communities that rely on Young Brothers can rest assured that we are not closing on June 1. We will serve our customers as long as possible while we pursue every avenue of assistance,” he said.

The company will continue delivering gas, groceries and other supplies to Molokai and Lanai. It will have special procedures after June 8 to continue transporting livestock between the islands.

However, it will not reinstate additional sailings requested by Molokai and Hilo farmers.

Young Brothers has about 370 employees across the state.

Young Bros. to PUC Letter by Honolulu Star-Advertiser on Scribd