Bob Seely and Red Funnel

The Isle of Wight’s MP has written to the Minister for Maritime, International and Security, Lord Davies of Gower, to raise Islanders’ concerns about Red Funnel services in advance of a Department for Transport meeting with the company.

This article first appeared in the Island Echo. See here.

In his letter, Bob Seely MP has reiterated concerns raised about Red Funnel in his report into the performance of the cross-Solent market. The report calls for government regulation of the cross-Solent ferry operators.

He states that he is concerned about the sale of Red Jet 4, which will leave just 2 hi-speed vessels to operate a 2-boat timetable on the West Cowes-Southampton Red Jet service.

Bob has told the Minister that Islanders are fed up with delays and cancellations and has questioned whether Red Funnel can run a stable timetable with only just 2 Red Jets.

Mr Seely goes on to say:

“I believe we should be concerned about the performance of both major cross-Solent ferry operators (Wightlink and Red Funnel). Successive buyouts and sales of Red Funnel have engineered the group to be heavily indebted to banks and shareholders.

“One of the things that concerns me most is that despite Red Funnel’s significant operating profits – over 20 percent of turnover in 2019 (over £13 million) – and its reported bank loans of over £125 million [in 2019], the company has not replaced its car ferries in almost 30 years and will still be required to ‘fundraise’ for investment in new ships.”

The MP has also told the Minister that the current model for cross-Solent ferry services had limited investment in connectivity and degraded passenger services:

“For a given Monday in February, in 1999, […] Red Funnel operated 32 passenger sailings from West Cowes; today it operates only 22 sailings. In 1999, the passenger crossing took 22 minutes; today it takes 28 minutes, in part to reduce fuel consumption. In the 2000s, the company maintained its two-boat passenger timetable using a minimum of three vessels. Today, Red Funnel has removed back-up vessels for passenger services such that if one vessel fails, the timetable can no longer be maintained.”

A number of questions have been put to Lord Davies of Gower by Bob Seely, which will also be asked of Red Funnel:

  • What is the value of the Red Funnel group’s total debt and what is the function of this debt? What is the ratio between the Red Funnel group’s capital value and debt?
  • What proportion of the Red Funnel group’s debt is index-linked? How much interest does the Red Funnel group pay on its debts per year and is this acceptable?
  • Over the past 20 years, has Red Funnel sought to reduce operating expenditure per passenger?
  • Over the past 20 years, has Red Funnel raised the average fare per passenger above inflation? This relates to the average of all fares given yield management pricing.
  • Does Red Funnel expect to maintain its current passenger service with two passenger vessels in use?

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