Marine

Come Home Year Helped Marine Atlantic Surpass Pre-Pandemic Traffic, Says CEO

Passenger traffic on Marine Atlantic’s ferry service jumped this summer to numbers exceeding those seen before the COVID-19 pandemic hit, the federal Crown corporation’s CEO said.

“Is this the new normal? We’re not sure. But it was definitely a rebound from the previous two years,” Murray Hupman told CBC News on Thursday.

Just under 160,000 passengers used the ferry service in July and August, nearly 20,000 more than the company recorded during the same period in 2019.

It’s also more passengers than the service carried during the 12 months of the 2020-2021 fiscal year, when the pandemic was at its peak and Marine Atlantic was forced to reduce the number of passengers on its ships, close onboard catering and retail services and to suspend seasonal service to Argentia.

“We’ve seen a great return to previous numbers,” Hupman said.

Murray Hupman is President and CEO of Marine Atlantic, the federal Crown corporation that operates the constitutionally mandated commercial and passenger ferry service between Nova Scotia and Newfoundland. (Terry Roberts/CBC)

The increase in business is linked to a general easing of public health restrictions, pent-up demand for travel and a celebration of the year of coming home promoted by the Newfoundland and Labrador government.

Commercial traffic, meanwhile, was steady, Hupman said.

Increased traffic was one of the highlights when Marine Atlantic released its 2021-22 report Annual Report for the year ended March 31.

The report shows that revenue and traffic increased, but so did expenses, as fuel prices soared and a return to full service led to an increase in the number of employees.

Shawn Leamon, vice president of finance, said revenue for the year was approximately $105 million, an increase of $13 million from the prior year. To balance the budget, the federal government subsidized the operation to the tune of $131 million.

Marine Atlantic is mandated to cover 65% of its operating costs through user fees, but the cost recovery rate for the past year was 60%.

Struggling to find workers

Marine Atlantic operates four ice-class vessels: MV Blue Puttees, MV Highlanders, MV Atlantic Vision and MV Leif Ericson.

The company is constitutionally mandated to provide year-round, 96 nautical mile daily cargo and passenger service between Port aux Basques, NL, and North Sydney, NS, which is a vital link between Newfoundland and the rest of Canada. It also operates a 280 nautical mile seasonal ferry service between Argentia and North Sydney.

Hupman said one of the biggest challenges the company faces is maintaining its workforce of about 1,300 full-time and part-time employees. He said many workers retired or left the company during the pandemic.

“We are always trying to fill those voids.”

Meanwhile, the first steel for a new ferry was cut at a shipyard in China in the spring, and the keel laying process is expected to begin next month.

Marine Atlantic plans to welcome a new passenger and cargo ferry to its fleet in the first half of 2024. The ice-class vessel will be approximately 200 meters in length, carry up to 1,000 passengers, and have 146 passenger cabins and 40 passenger pods . (Atlantic Navy)

A contract is due to be awarded in the coming weeks for a new administrative building in Port aux Basques, and the company hopes to obtain approval over the next few years to remove Vardy Island in Port aux Basques harbor to allow for a better navigation and the use of larger ships.

But don’t expect the construction of a new building in Port aux Basques to reignite the long-running debate over the location of the company’s headquarters.

“Marine Atlantic’s headquarters is clearly defined in St. John’s,” Hupman said.

Ship to be built in China

Last year, Marine Atlantic awarded a five-year, $100 million charter contract for a new vessel to Stena North Sea Ltd. The Swedish company has subcontracted the construction of the 200-meter vessel to Jinling Shipyard in China, which is scheduled for delivery in 2024.

The decision to build the vessel in China raised concerns with the Canadian Shipbuilding Association and came at a time when relations between Canada and China were strained.

Hupman says Marine Atlantic went to the international market for a vessel that met all of its specifications, and Stena was chosen.

“It was up to the operator and the owner of that ship to decide where they were going to build it. We’re just on the other end, leasing the ship,” he explained.

At the end of the charter period, Marine Atlantic will have the option to purchase the vessel.

“It’s all about reliability and availability…and this new vessel will help us deliver on that promise to the island.” Hupman said.

The ship will carry up to 1,000 passengers and will have 146 passenger cabins and 40 passenger modules.

MV Blue Puttees and MV Highlanders will remain in service after the new ships arrive, but Hupman said a decision will be made in the coming months on the fate of MV Atlantic Vision and MV Leif Ericson.

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