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July 24th 2008
Correspondence casts light on new ticket price structure

Another Sunferries trip to Magnetic begins Following Sunferries' increase in ticket prices on July 15 there has been considerable discussion over the way in which the increases were distributed across the various types of fares on offer. Following is a letter from Island resident Cittapala to Sunferries and the reply he received from, General Manager, Mr Darin McDonald which sheds further light on the rationale adopted by Sunferries in developing the new prices. (Ed)

Chittapala's letter:

Dear Sir,
Yesterday when I purchased a Pensioner Flexi Ticket I was surprised how much the fare had increased - from $42.10 to $51 - a 21.1% increase.
In comparison the Adult Flexi has increased from $84.20 to $93 - a 10.4% increase.

I know fuel prices etc have escalated the cost of many commodities. However, I would be grateful if you could please explain why Sunferries has chosen to increase Pensioner Flexi & Student Flexi fares by such a large increment, especially in comparison with the Adult Flexi fare.

Best wishes,
Picnic Bay

Note: The cost of the Magnetic Island ferry fares continues to rise. For example, when I first moved to the island in 2002 the cost of a Pensioner Flexi was $28. The present cost for a Pensioner Flexi of $51 represents a percentage increase of 82% over 6 years. I wonder how many transport services have been able to increase tariffs to such an extent in the same time frame....

Darin McDonald's response:

Thank you for your email,

The ticket price increase across the whole range of our ticket types averages out @ 9%, the calculation used is one that incorporates the volume of each ticket type sold and then configures the amount of increase to that ticket.

You are correct in pointing out that there has been significant cost increases over the last few years, and due to increase in costs to Sunferries and also the minimal (if any real growth to the Island in passenger numbers) obviously the Islanders feel the cost impact more.

Sunferries is committed to ensuring that we are looking at the cheapest and safest way to operate to ensure that we can keep our prices as low as possible. We have done this and continue to do this by building fuel efficient and comfortable vessels and looking at ways to add better value to the travelling public.

Queensland Transport reviews all applications for increases that companies send through to them, and we have to be able to justify any potential increases through a rigid system they have.

I am sorry for any impact that this has on you, but this increase was required to allow Sunferries to remain a viable service to our valuable passengers to the Island.

Darin McDonald
General Manager
Sunferries Pty Ltd

To add your comment,
or read those of others, see below

Correspondence casts light on new ticket price structure
July 24th 2008

A question - With petrol prices having decreased in the past week will Sunferries also decrease its ticket prices to reflect any decreased cost of fuel??

This would seem to be a very reasonable question, and expectation of ferry passengers, given Sunferries states its increased prices of 9-21% were due to the increased cost of fuel....

Chris C
July 24th 2008
It is beyond me ... exactly how does

"the calculation used is one that incorporates the volume of each ticket type sold and then configures the amount of increase to that ticket"

... explain the inequity in the price increments??

As for the rest of Darin's response - fuel and wage infation certainly doesnt explain a 82% price increase in 6 years !!!!

I've not done the sums but I'd put my money on barge price increases being nothing like ferry price increases over the period.

If i'm right then there is essentially only three factors which would make the difference - the Companies' level of profit re-investment in the business, their choices of boat for the job and the quality of their Board and management.

July 24th 2008
Of particular interest in Darin's response is his comment, "over the last few years ... minimal (if any real growth to the Island in passenger numbers)".

Further proof, if any were needed, of the failure of the NBH development to meet its oft-vaunted but oft-queried claims for providing benefits to the island.

When, during the court case, a witness for opponents to the development (an internationally known and respected economist) described as "useless" the economic analysis presented by the developers (who claimed massive growth and great economic return to the island), the Tribunal members (neither qualified in economics) disagreed with the witness - and found in favour of the developers.

Could this outcome be widely circulated and seriously noted by others who make such claims for other developments. Indeed, if anyone has contact details for Ted and Stephanie - from memory the names of the Tribunal members - I'd be more than happy to apprise them of the facts as they occurred.

I ask all those in government, at whatever level - but especially the local level in Townsville, to please take an empirical approach to decision-making and learn from history.

Donald Simpson
July 25th 2008
Chitapala's main point (please explain why Sunferries has chosen to increase Pensioner Flexi & Student Flexi fares by such a large increment, especially in comparison with the Adult Flexi fare) was not answered in Darin Macdonald's response. I asked the same question when buying a Pensioner Flexi a couple of days ago, and was told, patronisingly, that pensioners received a very good deal - half fares. My reply to this was that $51 dollars was more than half of $93 dollars. The response to this was a grunt.
Anthony of Brisbane
July 25th 2008
As a past resident I can look back and say that the cost of a weekly ticket really has not gone up that much for the increased service level that the Island is recieving. It was not that long ago that Islanders were putting up with the MS Mandalay and its 45 minute trips to Picnic Bay, and no regular night services and that was still costing $55.00 for a ten trip ticket 10 years ago. A $40.00 odd dollar increase over 10 years does not sound like an unreasonable increase, actually it is only $4.00 per year. At the end of the day you choose where you live. I do not complain about having to pay for Parking, Tolls and Public transport just because I live in brisbane (and just for the record it comes to a lot more than $84.00 per week. And can you all please move on mrom the Nelly Bay Harbour issue, It is built, it is not going anywhere and whinging about it will not change it. I aggree that it should not of gone ahead but the real damage was done when they startted blasting in the early nineties. Islanders should be thankful that they don't have to walk the picnic bay jetty in pouring rain anymore. Finally if Sunferries were not to increase their prices they would not be able to service the Island so I hope that you all have boats or like catching the barge to and from work.
Darin McDonald
July 25th 2008
Despite consistent and rapid hikes to fuel prices, Sunferries absorbed the expense and waited many months before applying to Queensland Transport to increase fares, which were approved in July, and these prices are consistent with other similar transport industry fare increases. In setting these prices the potential for ongoing fluctuation with fuel prices has been factored in. It is not feasible to alter fares on a regular basis as it would make budgeting difficult for both our company and our customers, and we believe it averages itself out so that the customer is not disadvantaged. (This comment from Sunferries' General Manager Darin McDonald follows a request that he respond to a comment from reader, Tracy, above. Ed)
July 25th 2008
It's great that you Islanders have a place to argue about issues like this and I really think there are good points coming out. But, I've got to say that surely this is simply a reflection of what is the real elephant in the room (or on the ferry) which is the plain fact that the oil age is coming, maybe rapidly, to an end and we all have to get used to it.
July 26th 2008
Over the last few years Sunferries have improved the Magnetic Island ferry service. The number of daily trips has increased and the boats are faster and more reliable and comfortable. Given this, one has to question why the customer numbers have not risen in this time. I would suggest that the continuing high cost of fares is a major contributing factor: this actually discourages people from visiting Magnetic Island.

I work part time in a Townsville backpacker lodge where many budget travellers have told me they will not visit Magnetic Island as they feel the fares are too expensive. As well, I have met many Townsville residents who rarely go, or who have never been to the island for the same reason. What does Sunferries do to try to attempt these types of potential customers? Have they researched the market into ways to attract more customers? I know there are various ferry-accommodation packages, but I am sure there are further means to attract customers. Whenever I need to fly, I try to book ahead and usually obtain lower priced fares. Some airlines understand that it is better to have
July 27th 2008
On public transport pensioners get half adult fare..are you not public transport?
The failure to increase numbers of passengers is a failure by you marketing people and your fare structure to attract passengers
Darin you did not answer why the people who can least afford the increases got the biggest slug
Wendy Tubman
July 27th 2008
A somewhat belated response to Anthony of Brisbane. Being the only respondent to mention the failed Nelly Bay Harbour development, I can only assume that Anthony was directing his comment toward me. Well, sorry if this upsets you, Anthony, but if you mean will I stop (ever) holding up NBH as an example of what NOT to do - in the hope that this will stop similar
July 29th 2008

Below is a a copy of fax sent by to Mike Reynolds, Member for Townsville on 28th July 2008. When I receive a reply I will post it here. Member for Townsville The Hon Mike Reynolds AM MP
Dear Sir,
I wish to draw to your attention fare increases introduced by Sunferries on 15th July 2008 for travel between Townsville and Magnetic Island. The cost of Pensioner & Student Flexi tickets has risen from $42.10 to $51, an increase of 21.1%. In comparison, Adult Flexi tickets have risen from $84.20 to $93, an increase of 10.4%. In these instances, the highest pro rata fare increases have been imposed on the the lowest income groups, namely, pensioners and students.

On 24th July I wrote to Darin McDonald, General Manager of Sunferries asking him to explain why there was such a disproportionate fare increase for pensioners and students. Mr McDonald replied:

"The ticket price increase across the whole range of our ticket types averages out @ 9%, the calculation used is one that incorporates the volume of each ticket type sold and then configures the amount of increase to that ticket."

And further, "QT reviews all applications for increases that companies send through to them, and we have to be able to justify any potential increases through a rigid system they have."

I would be very grateful if you could please contact Queensland Transport and ask these questions:

Why did Queensland Transport allow Sunferries to increase Pensioner & Student Flexi fares by so much?

Can Queensland Transport review its policy on pensioner & student concessions in order to ensure that these groups are not subject to higher pro rata fare increases in future?

I have spoken with Lorna Hempstead, President of MICDA, and she concurs with my requests to you.

Yours sincerely,
July 31st 2008
Anthony of Brisbane is a very unreliable source for this story. The Mandalay was an excellent vessel for the Magnetic Island run in the 70s and 80s - before aluminium catamarans were developed. It made about 12 knots and took 35 minutes to reach Picnic Bay. The Islander IV which (first) replaced it only knocked about ten minutes off the trip....but was considerably more expensive (Hayles charged a special fare for the "fast" cat). My memory is not perfect but I reckon the Mandalay left Townsville nearer to twenty years ago - after all, the Westmark boats came here after the Americas Cup series at Fremantle - wasn't that 1988? Mandalay left soon after.
What I do remember is that when Sunferries started up (must be nearly ten years ago) the two other operators back then were charging $19 for a return ticket. Sunferries' start up return ticket was about $13.
Of course there's context for all these changes and charges and although I agree with Chittapala's particular beef about the seemingly unreasonable attention to pensioner/student fare increases I don't see that Sunferries is actually gouging generally. In the spirit of revelation perhaps Sunferries would release the annual passenger numbers - records of which I have kept for many years (eg.1974 - 236,000) - so that we can see whether my guess of 400,000 has yet been exceeded.

Ken Dun
August 3rd 2008
Anthony of Brisbane
August 19th 2008
Thankyou Ken for pointing out the unreliability of chasmac's comments. The Mandalay ran for a period in the late 90's as a replacement for the islander 4 and Magnetic Link ferries that was up on dry dock for maintenance. The ferry was slow and would leak during high seas and was far from a suitible replacement for the fastcat. They also charged full fares in this period for the sub standard service.
September 1st 2008
My husband and I used to live on Magnetic Island and are considering returning except the ferry fares are a real issue especially as we will need to commute regularly and also have to get from the Breakwater Terminal into the CBD and beyond. No-one appears to have commented that not only have the fares increased over time but services have dimished, i.e. no longer at Flinders St East and there is not a dedicated bus to meet the ferries - locals have mentioned that it is now very difficult, particularly in the summer months to have to walk into the CBD to work as the buses do not arrive quite the same (and this is not a reflection on the bus drivers, they have a rotten job) as when there was a dedicated service. One cannot expect buses which are coming from as far away as the University, Hospital, Stockland to be able to meet the ferries on time. It is a difficult decision whether to return or not as one does feel one is being held hostage to the ferry fares/timetables. As one person has mentioned, why not widen the customer base instead of slugging the residents who are the bread and butter of the service. Like many businesses who are doing poorly the philosophy often is to slug the regulars' pricing instead of getting more bums on seats.

What do you think? Send us your comments.

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