Wightlink the facts - october 2013

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Wightlink the facts - october 2013

  1. 1. Wightlink - the facts - October 2013
  2. 2.  This document seeks to build understanding of the complex range of factors which Wightlink balances when making decisions about pricing and services.  It also highlights that ...  Wightlink services are highly rated by customers and operate to a high level of reliability.  Wightlink is Part of Island Life, offering a comprehensive timetable, discounted fares for Islanders, and support for charities and vulnerable groups.  Wightlink is investing to secure the future of its services.  This is a competitive market where Islanders enjoy a high level of service from the three operators.
  3. 3. Wightlink balances a complex range of factors when making decisions about pricing and services
  4. 4.  At Wightlink we take a rounded approach to planning our services and prices, and measuring their success.  We know that frequency is important, but it is not the only measure which matters to our customers, staff and shareholders. As a private business, which operates with no public subsidy, yet is subject to increased regulation and legislation as well as rising costs, we must balance the interests of all three groups.  We monitor closely how customers are using our services and align our timetables to match with when the overwhelming majority are travelling. Nevertheless, we run thousands of loss-making sailings and last year ran 500 sailings which were completely empty!  Our customers appreciate our focus on safety and recognise our obligations towards the environment.  By taking all of these factors into account, we can secure the future of our services for the benefit of Island and mainland customers, staff and investors.
  5. 5. Year Ending 2012 0.0% 20.0% 40.0% 60.0% 80.0% 100.0% 0 25000 50000 75000 100000 125000 Apr May Jun Jul Aug Sep Oct Nov Dec Jan Feb Mar Lymington-Yarmouth VEHICLE CEU Capacity Utilisation Utilisation % In order to secure the long term viability of our services, and faced with rising costs and a flat market, Wightlink has to match timetables with customer demand. When services are consistently under-used, the company has to review whether they are viable. For example, the services withdrawn from the timetable in December 2012 typically operated 93% empty for passengers and 80% empty for vehicles. On the Yarmouth- Lymington route, average monthly utilisation regularly drops below 40%. Sailings have recently been retimed throughout the day to allow better connections with trains from Lymington Pier. Wightlink matches its timetables with customer demand 2012-13 financial year
  6. 6. Year Ending 2012 0.0% 20.0% 40.0% 60.0% 80.0% 100.0% 0 100000 200000 300000 400000 500000 Apr May Jun Jul Aug Sep Oct Nov Dec Jan Feb Mar Portsmouth-Ryde PASSENGERS Capacity Utilisation Utilisation % The high-speed catamaran services operate at relatively low utilisation, reflective of the high number of sailings. Even at peak Festival times, sailings are only full on one leg of a return journey. Wightlink matches its timetables with customer demand Wightlink continues to operate thousands of loss-making sailings a year across its three routes. This is part of our commitment to being Part of Island Life. However, as a private business operating without public subsidy, we must have the flexibility to adapt our services in the face of usage by our customers. All operators face the same pressures. For example, Red Funnel cut more than 1,000 sailings from its annual timetable from 2011-12, and Hovertravel recently cut the size of its fleet by 33%. 2012-13 financial year
  7. 7.  We never compromise on safety, even if it could cut costs.  We invest in more highly qualified crews as part of making safety our priority.  Our standards of certification well exceed the legislative requirements.  We invest in internationally accredited training not required for domestic operators.  We regularly operate with more crew members than required by legislation.  We maintain our ships to very high standards, even if it costs more.  This means using high quality, and often more expensive, materials.  For major works we always bring in specialist engineers, and wherever possible use the original manufacturer’s own staff and spare parts.  Running more services means more maintenance and more cost. Wightlink never compromises on safety
  8. 8.  Our CO2 emissions have dropped by almost 25% since 2007.  We are taking a leading role in converting our ships to cleaner fuel.  The new ships we have invested in for two of our three routes burn fuel more efficiently.  Larger ships operating less frequently burn less fuel.  We operate a pioneering habitat management programme at Lymington in partnership with a wide range of environmental stakeholders.  We have made outstanding progress on recycling and now recycle over 60% of our waste.  All of this comes at a cost, and is one of the factors we must consider when planning our services. Wightlink takes its environmental responsibilities seriously
  9. 9. Wightlink services are highly rated by customers and operate to high levels of reliability
  10. 10.  Over 1,400 customers were surveyed in summer 2013.  Over a third rated Wightlink’s service as excellent, and 80% rated it as excellent or good.  Almost two thirds rated Wightlink’s service as excellent, good or acceptable value for money.  Around 70% of customers who expressed a preference, said Wightlink was their preferred cross-Solent operator.  Only 5% of customers said they would not recommend Wightlink to a friend. A recent survey found high levels of customer satisfaction
  11. 11.  Wightlink consults regularly with customers and gains feedback through a wide range of sources.  It has supported the establishment of ferry user groups:  The recent timetable changes at West Wight were shared with the Yarmouth Ferry User Group.  The retiming of sailings to dovetail with train times was as a direct result of YFUG input.  Other valuable input regarding timetabling is currently being considered.  It is hoped that a similar group will soon be established for the Eastern routes.  Our uniforms now invite customers to provide feedback@wightlink.co.uk.  Managers are regularly onboard speaking with customers.  Directors regularly engage with local businesses and sit on a range of local boards and committees.  The company invests in Mystery Shoppers to ensure levels of customer service are constantly improving. Wightlink regularly consults with customers and other stakeholders
  12. 12. Route Reliability Punctuality Portsmouth-Fishbourne 99.8% 83.3% Lymington-Yarmouth 99.5% 88.6% Portsmouth-Ryde 99.8% 99.4% Wightlink operates a highly reliable service Lymington-Yarmouth Reliability Punctuality 2012 2013 2012 2013 July 2013 99.2% 99.5% 91.0% 87.0% Wightlink operates a highly reliable service to an excellent degree of punctuality. Where punctuality performance falls, this is often due to matters outside the company’s control, such as harbour movements and weather restrictions. 2013 year to date information. Reliability refers to the proportion of sailings which actually operated. Punctuality refers to those sailings which departed within 5 minutes of published departure time. The proportion of on-time arrivals is typically higher as vessels can make up time en-route. Reliability on the Lymington-Yarmouth route has marginally improved year on year. Punctuality has reduced; the restrictions of operating in the narrow channel at Lymington limiting the ability to make up time during busy periods (during 40 minute timetable).
  13. 13. Wightlink is Part of Island Life
  14. 14.  Wightlink operates a 24 hour timetable on its flagship Portsmouth-Fishbourne route.  Wightlink operates thousands of loss-making sailings ever year, recognising that Islanders, commuters and local businesses rely on its services.  Last year Wightlink operated more than 500 sailings which were completely empty.  Wightlink receives no public subsidy for its lifeline services. Wightlink operates lifeline services
  15. 15. Wightlink’s annual programme offers £350,000 of support to over 100 charities, arts groups and individuals. Wightlink is the only Solent ferry operator to have such an extensive programme of support in place.  17 Island athletes  40 members of the IOW Council ‘Talented Athlete Programme’  35 teams covering a variety of sports ranging from Ice Hockey to Speedway  17 charities including St Catherine’s, Hampshire & Isle of Wight Air Ambulance and the Earl Mountbatten Hospice  Sponsorship of Festivals  6 arts organisations Wightlink is one of the biggest charitable donors on the IOW
  16. 16. Wightlink provides discounted travel to support more vulnerable sectors of the Isle of Wight community who through health reasons require frequent travel to the Mainland or are more likely to be financially restricted.  Blue Badge Holders receive discounted travel. In 2012, this amounted to more than 25,000 journeys, which Wightlink discounted by over £100,000.  Isle of Wight Residents who need to make frequent hospital visits to the Mainland receive a 50% discount. In 2012, over 4,000 journeys were made (a total discount of around £40,000). Wightlink offers an unrivalled discount travel scheme
  17. 17. Wightlink provides Islanders with a range of discounted fares. These give savings of up to 50% in the peak and 30% in the off peak.  Season tickets for foot passenger travel  Student discounts of up to 50% (plus tailor-made annual tickets to cover the academic year)  Multilink tickets for car and motorcycle travel  Isle of Wight Resident Fares (fixed price bands throughout the year)  Reduced foot passenger fares for Island-originating travel  Full access to Promotional and Economy Fares  IOW Council employee discount Wightlink offers an unrivalled discount travel scheme
  18. 18. Wightlink is investing to secure the future of its services
  19. 19. New ‘W’ class vessels on Lymington-Yarmouth New catamarans on Portsmouth-Ryde New retail facilities New terminal facilities New toilets in ports and onboard Wightlink has invested almost £60m in the last 5 years alone
  20. 20. Wightlink is owned by the Macquarie European Infrastructure Fund (MEIF), whose investors are pension funds. This type of capital is well suited to the long-term investment which companies such as Wightlink need.  Our shareholders have invested almost £60m in the last five years enabling Wightlink to purchase new ships and improve ports and facilities.  An OFT investigation concluded that Wightlink’s level of return on capital employed was reasonable. Comparison showed that 75% of FTSE companies achieved a greater level of return.  In order to secure future investment, including in the new ships needed on the Portsmouth-Fishbourne route, Wightlink and its shareholders need as much certainty as possible about the future of the market and the operating environment.  Continuing negative publicity creates uncertainty and threatens investment. Committed shareholders who make a reasonable return
  21. 21. A competitive market offering high levels of service for Islanders
  22. 22.  Islanders enjoy a very high level of service with more than 150 sailings a day from three operators to and from the Isle of Wight.  This compares very favourably to the level of service which was provided when the routes were in public ownership. Wightlink’s Portsmouth-Fishbourne service runs 33% more sailings than when in public ownership*.  Wightlink operates 16% more sailings a day (midweek) on its Portsmouth to Fishbourne route than Red Funnel runs on its comparable Southampton to Cowes service, and runs 83% more sailings than Red Funnel at busy weekend periods to meet customer needs. When Lymington-Yarmouth is factored in, these figures increase to 194% and 272% respectively.  Like Red Funnel, Wightlink’s catamaran offers a twice hourly service to meet demand at busy commuter periods, and runs hourly during midweek daytime periods. * Timetable comparison of 1974 with 2013

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