First, from my last analysis,
HI Superferry: An Analysis of the New Superferry Prices, looking at just the Maui service that thusfar has been proposed by the Superferry, I decided to do a Break Even Analysis.
I'm going to leave out the calculations, but mention some key assumptions first: I'm using the prices that the ferry proposes for the two time periods that start on Dec. 1 and change on Dec. 21. There is no fuel surcharge in the first period, but I am assuming a fuel surcharge starting Dec. 21 comparable to what the company was previously going to charge. Since the company right now is proposing to operate between Oahu and Maui, I generously assume they can reduce cost by as much as $150,000 per week by reducing employees they call back initially, particularly on Kauai. I make another generous assumption that the Superferry can sell on average at least $10 worth of merchandise, food, or beverages to each passenger; with the higher load factors to get to break even, that is about twice what I previously assumed they might sell onboard. I decided that the company cannot likely significantly or materally reduce their fuel cost by sourcing at below wholesale from the government, so I'm leaving that out.
With these realistic assumptions the Break Even Point for the Maui Operations alone would be:
From Dec. 1 to Dec. 20, BEP:
866 passengers at $29 per person and
282 vehicles at $55 per vehicle
(which happens to be Superferry capacity)
From Dec. 21 to Mar. 12, BEP:
644 passengers at $39 per person and
218 vehicles at $65 per vehicle plus a $17 fuel surcharge on each vehicle = $82 per vehicle
Those are very high break even points; but, of course that is only with the Maui operations. So, let's add in the prospective Kauai operations.
First, what about with passengers and no vehicles to Kauai? The people can rent cars already on Kauai and the rental car companies can use their shuttles to pick the people up at the Harbor, as with the cruise ships.
What I find is that just to cover the cost of fuel alone for the transit to Kauai with passengers only, the Break Even Point in passenger numbers to cover the incremental cost of fuel only at the $29 fare is 471 passengers. And for the $39 fare is 350 passengers. And conversely, the BEP fare price at the average expected by the company of 400 passengers is $34, to cover fuel only. The question you have to ask yourself is how likely are an average of 350 to 471 people going to take the Superferry to Kauai on what will likely be at least a 3 1/2 hour ride without their personal car, to rent a car when they get there. And this all would only be for the company to just cover their fuel cost to and from Kauai.
It was not the conclusion that I had hoped to find, but to me it looks like it would not be worth the incremental effort for the Superferry to go to Kauai with passengers only. There is further Break Even Analysis that I did regarding Kauai, but I disstilled it down to the above conclusions for the sake of brevity.
Since I just mentioned inspections above, I'll go into that some more here. Assuming as many as 280 vehicles to inspect, at least to Maui and back, that the company would need to break even, it could take many hours to inspect them all even if only 4 -5 minutes was used on each vehicle, assuming only 1 or 2 inspectors. I propose there be at least 10 company inspectors operating at once. They would be able to take 4 - 5 minutes on average on each car and it would take 2 hours to inspect a full capacity load of cars, and that would be required to be started at least an hour before the Superferry arrives at each location. Passengers would be notified when they book fares that they have to arrive 2 hours before departure for vehicle inspection should they be bringing a vehicle.
I also went into some detail regarding the schedule, distances traveled, time, and speed constraints...I'll make that the next post.