Trasmediterranea rules out long-distance fast ferries due to bunker price volatility

Business model based on high speed over long distances 'would not make much sense', says GM.



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Updated on 07 Apr 2017 09:48 GMT

During a week that has seen Spanish ferry line Trasmediterranea announce the launch of a new high-speed service connecting the Spanish mainland to Ibiza, its general manager has ruled out the idea of the company basing its business model on using high-speed ferries for "long" routes.

On 12th April, the company's high-speed ferry, Almudaina Dos, will shuttle passengers between Sant Antoni de Portmany in Ibiza to Gandia in Valencia, with the average journey taking just two-and-a-half hours.

However, in the opinion of general manager Mario Quero, the problem with high speed is that the business model "is very exposed to fuel volatility".

"High speed makes sense when distances are short and justified, and when the fuel price is at moderate levels," Quero remarked, whilst adding that high-speed ferries for longer distances "would not make much sense".

Quero also noted that high speeds would not need to be maintained during the off-season, once the summer period is over.

The ferry line is keen to limit its risk exposure and learn from past experiences. Referring to what happened to the company back in 2007 and 2008 during a period that saw Brent rise to record levels, Quero said that an increase in the price of bunker fuel led to "a rupture in the financial balance of the project".

Having seen how the market has behaved in the past, Trasmediterreanea is keen to limit its exposure moving forwards.

"When we make decisions, we look at the past a lot. Five years ago, we had Brent at $120 a barrel; in 2016, it fell to $30 and now it is around $50. We have to refer to models where exposure to fuel volatility produces the least possible impact," Quero said.

Trasmediterreanea is also focused on looking at cheaper and alternative fuels, and not just using marine gas oil (MGO), Quero explained.

Additionally, the company has embarked on a plan, which began in 2015, to raise the capacity of its current fleet and improve efficiency.