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Island ferries struggle in a tight business climate

Date Posted: 2005-12-01

Operating inter-island ferries is becoming more unprofitable by the day, and some companies could wind up going out of business.

What the central Japanese government’s Trinity Reform Plan hasn’t fouled up financially, rising oil prices have. Ferry operators say oil costs have soared in the past year, creating all sorts of business problems.

Heavy oil is up 30%, a ferry company executive says, “so when we work, more red ink is coming. It is better for us not to work.” He says the double whammy of the oil price hikes and the loss of government subsidies is killing their business. Prefecture officials agree that “By Trinity Reform, we have to take care of the island’s own budget. We don’t have any budget for ferries anymore.”

Ferry costs are going to be going up. Ferry Aguni plies the waters between Naha and Aguni Island, operated by Aguni Village Office. The Village has announced plans to jack prices 20% to cover rising costs. The proposal goes before village assembly members at a business meeting this week. An official says the rate increases will apply not only to passenger fares, but to cargo tariffs as well. He says oil prices along have soared \20,000,000 above normal in recent months.

Tokashiki Village has the same problem, and is thinking of increasing ferry fares. The village, which just renewed its ferry, is already operating at a deficit. No decisions have been made yet on how much the hikes will be.

Motobu Harbor and Ie Island Ferry are also reporting problems. Ie Village Office says “Our ferry is making a good profit, but it is going to be quickly reduced, and we are very worried about the budget cuts from the states. We simply do not have the budget to continue the way things are now.”

Iheya Islands Ferry Iheya says the mail could suffer as a result of the cost increases. “Sea mail has relied on subsidies from the states and central government, but since the Japanese government has decided to cut the money, we have a very hard life.” The official says the routes are already running in the red, and “even with the subsidies we were at a deficit.” Now, the company isn’t sure what to do, and has turned to Okinawa Governor Keiichi Inamine for help.

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