BC Ferries has reported a first-quarter net loss of $62 million as the organization deals with significant impacts from the COVID-19 pandemic.
In comparison, the company reported net earnings of $12.2 million over the same period in 2019. The first quarter spanned over three months and ended on June 30, marking a period of time where businesses were shut down and travel was restricted across British Columbia.
According to the BC Ferries, revenue for the quarter totaled $137.4 million, which was down $109 million year-over-year. BC Ferries does point out, however, that this decrease in revenue was partially offset by reductions in operating expenses of $36.7 million compared to 2019’s first quarter.
“While COVID-19 continues to have a profound impact on our business, I want to express my deep appreciation to our frontline staff who came to work every day in the depths of the pandemic to provide lifeline service to coastal communities,” said Mark Collins, BC Ferries’ President and CEO. “I also want to thank our customers for their patience as we all work towards a new normal.”
As a result of travel restrictions and a significant drop in ridership, BC Ferries cut down its service on many of its sailing routes. BC Ferries reports that ferry traffic dropped dramatically at the onset of the pandemic, reducing by 75 to 80 per cent in a matter of days.
Also in response to the significant impact COVID-19 has continued to have on the ferry operator, BC Ferries said it deferred capital expenditures and has reduced discretionary spending.
“We made prudent decisions to remove costs for the health of the ferry system. This is decisive action to safeguard the coastal ferry service for the long term, while continuing to provide essential services to customers and communities,” said Collins. “We have been bringing back service capacity to coastal communities ahead of gradually increasing demand.”
Following the Province’s announcement that the ban on non-essential travel was being lifted, traffic at the end of June partially recovered and was down approximately 35 per cent compared to this period last year, BC Ferries said in a press release.
According to the quarterly numbers, the travel authority delivered 18,249.5 round trips over the three month period – a decrease of 2,340 or 11.4 per cent when compared to 2019.
The ferry service outlines they carried 2.2 million passengers and 1.3 million vehicles during the quarter, which is a decrease of 61.5 per cent and 46.7 per cent, respectively.
In an effort to assist with the significant losses experienced by BC Ferries, the provincial government announced that the organization would be one of the entities included in the transit funding being invested through the Safe Restart Agreement with Ottawa.
This means that BC Ferries will receive a portion of a $1.08 billion dollar total funding envelope in order to help overcome the financial losses.
Along with its quarter resulted, BC Ferries also highlighted the outlook of capital projects over the coming years. The company suggests that it will continue with essential investments into safety and core services, which includes the construction of four more Island Class vessels.
The first two Island Class ships – Island Discovery and Island Aurora – were deployed for service earlier this year, marking the first hybrid electric ships in BC Ferries’ fleet.
The company adds that the construction of an additional Salish Class ferry is also currently underway.
“As the company responds to COVID-19, it will continue to provide resilient ferry service in the public interest,” a statement in the release reads. “BC Ferries will aid B.C. in its economic and social recovery through the vital role it plays in serving the needs of coastal communities.”