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The Honolulu Advertiser
Posted on: Sunday, November 23, 2008

COMMENTARY
Sailing into the future with an optimistic outlook

By Jeanne Mariani-Belding

Hawaii news photo - The Honolulu Advertiser

Tom Fargo | President and CEO of Hawai'i Superferry

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Each week Editorial and Opinion Editor Jeanne Mariani-Belding hosts The Hot Seat, our opinion-page blog that brings in elected leaders and people in the news and lets you ask the questions during a live online chat.

On The Hot Seat last week was retired Adm. Tom Fargo, president and CEO of Hawai'i Superferry.

Here is an excerpt from that Hot Seat session. To see the full conversation, go to The Hot Seat blog at http://hotseat.honadvblogs.com.

(Names of questioners are screen names given during our online chat.)

Barbara: As a president and CEO here in Hawai'i, what is your take on our economy?

Tom Fargo: We are experiencing the same economic conditions you are seeing in the country and rest of the world. Japan is in recession, we are probably in recession depending on your definition. Tourism is down, which impacts the airlines, hotels and retailers. It's going to take a while to rebound. So this is a time where we all pull together to help each other through a tough patch and try to make good decisions such that the community will come out of this stronger.

Jo: What is the situation with Kaua'i (protesters) as it pertains to your business?

Fargo: Providing service to the people of Kaua'i has always been a goal of HSF, and we are optimistic we'll be able to do so. With the draft EIS scheduled for completion in January 2009 and all of the data for more than seven months of operations between O'ahu and Maui, everything there is to know will be available to the public. In passenger intercept surveys, 99 percent of riders indicate they would recommend it to their family and friends. It would appear that there is a strong sentiment within Kaua'i for our service.

Randy: Due to the cutback in services between the Islands and putting the additional ship on hold, are you planning on raising the service fees? Also, since fuel prices have gone down, does this play in the future revenue or service fee projections?

Fargo: We have not been passing the fuel surcharge along to our passengers and non-commercial vehicles since we started expanded operations in April and have no plans to for the foreseeable future. Our fees are actually approved by the Public Utilities Commission, which has provided some flexibility in adjusting fares within approved boundaries. Our expectation is that we will make minor adjustments within this range based on market conditions, but it is clearly to our advantage to keep our prices low and competitive, and we believe they are. Plus we don't charge for bags, surfboards or other recreational items.

John: Have there been problems with the whale migration this year? Were there any near misses or close calls, and how are the whale detection instruments working out?

Fargo: HSF executes the most comprehensive whale avoidance policy of any ocean operator in the state and one that is supported by the Hawaiian Islands Humpback Whale National Marine Sanctuary Advisory Council. Like any ocean operator, we can't guarantee that an incident will never occur, but we can guarantee that we are taking extensive preventative measures to avoid such an incident. You may have seen the recent comprehensive article in The Advertiser talking to our whale avoidance technology and procedures both day and night. If you're interested, our whale avoidance policy is available on our Web site at www.HawaiiSuperferry.com.

Joe M.: What are ridership figures daily, weekly, monthly? What are the numbers of individuals, including vehicle types, using Superferry? What does the future really hold for the Superferry?

Fargo: Ridership over the summer ramped up right on our first-year projections to a total of about 37,000 passengers in July. The numbers fell off as projected in the September travel shoulder and then bounced back up in October, where we carried on average 280 people a trip. To date, we've carried more than 180,000 passengers and 50,000 vehicles. The vehicle mix includes personal vehicles, and two basic classes of commercial vehicles: large carriers such as Love's Bakery, FedEx, Freight Forwarders and significant numbers of small-business trucks. Passengers to date have been approximately 85 percent kama'aina, with 50 percent repeat travelers.

We're just starting to gain traction with the tourist markets and expect to be in full swing in the spring as the tourist packages we've been working on are available.

Tina: Whatever happened to the other Superferry? Are you still planning on having two here in Hawai'i?

Fargo: The second ship is 92 percent complete and fully painted out in Hawaii Superferry colors. We were equally disappointed that we had to postpone our service to the Big Island, but this was a prudent business decision in an uncertain economic climate. We are eager to get the second ship here as soon as possible because it's a significant part of our future business plan.

Billy: Do you have contracts with the military to haul equipment, personnel and supplies to the outer islands? How much of your business is supported by the military? On another note, do private businesses contract out with you to ferry equipment to and from the islands?

Fargo: Our emphasis has been and will remain that of establishing a regularly scheduled ferry system for the residents, visitors and businesses of Hawai'i. That's how we make this a successful business. It's the volume of passengers and vehicles. Certainly we will support our local military. As you may remember, Alakai, in conjunction with the National Guard, provided disaster relief last year during the floods on Maui.

Angel: What are the rules regarding things put on top of the vehicle going on the ferry, if they don't fit in the car?

Fargo: As long as it does not exceed 8 feet in height, the sky's the limit! That's because the majority of the vehicle deck is limited to 8 feet. However, if you've got something that exceeds 8 feet, we can also book you along with the large commercial customers, but the rates are higher above 8 feet.

Dan: What new technologies for energy efficiency and customer service is HSF implementing?

Fargo: Fuel efficiency has been a top priority and we have reduced fuel consumption by 30 percent per round trip since starting operations. We have one of the most technologically superior bridge and navigation suites in the country that allow us to operate efficiently and maneuver the ship very quickly and precisely. With respect to customer service, the vast majority of our customers book online and gain all the relevant information and boarding pass before they ever get to the terminal. We are working with our extensive audio visual system to provide both educational opportunities as well as news. And of course you have full Internet connectivity with your laptop and cell phone connectivity throughout the majority of the voyage.

Reach Jeanne Mariani-Belding at jmbelding@honoluluadvertiser.com.