Mezeron & Steam Packet Master Thread

[jimbms]

I think you will find if the SP went tits up the craft would revert to the hands of the government as unless I am wrong they are the surety for the loan so therefore could be seized, on the other subject I think compared to Dohle the SP is a small time leasure boat outfit so would therefore not be able to sustain a price war. I think we are about to enter some interesting times as far as sea travel goes on this fair isle with the end result of the aussies going down under.

[Tugger]

If the Isle of Man Government were then to say - backed by a court - "do it anyway under the terms of the agreement", the company would go bust and nobody would be any better off. Macquarie could then sell off the saleable assets (the Manannan, the Ben and any real estate) and pack up, or it could do another 'deal' with the government, in which we'd still end up with a worse level of service

 

I don't think that this is necessarily the case. The fact is that Macquaries targets for its return on investment are quite aggressive, and it paid a shit load of money for the Steam Packet. If the Racket breaches the User Agreement, the IOMG would be able to terminate it, and the Racket would watch its £200m asset get revalued to zero.

 

If you then paid the government, say, £10 million for a User Agreement giving the same level of exclusivity for x years, you could make it pay its way.

 

The trouble is that Macquarie are badasses, and our government is weak and foolish. The government DEFINITELY has the whip hand in this relationship now, but whether it will use it is another story

[When Skies Are Grey]

All this reference to Macquarrie....are they still involved. I thought their minor shareholding was sold some while ago....

[In fact . . .]

The Isle of Man Steam Packet is owned by long-term investors including Macquarie Bank

[Skig]

The Isle of Man Steam Packet is owned by long-term investors including Macquarie Bank

 

How accurate is that?

It says Superseacat II is part of the current fleet but it last sailed with the racket in 2008.

As for your earlier post about assets, thats a bit of a joke. They (the owners) sold their land on Bath place / Parade street along with their head office to the Government a few years ago.

As for the fleet, next year Snaefell will be a 20 year old tub that nobody wants, and both Manannan & the Ben will be 13 years old, so not exactly prime targets for selling on the shipping market.

[The Thriller]

we should have a MEGATHREAD FOR STEAM PACKET at the top of the screen.

 

Far too many.

[monasqueen]

There was always freight competition. Nothing fundamental has changed. Shift towards containerization gave Ro Ro the advantage over the years. But it isn't a given. Lift On / Lift Off is fine for relatively small quantities. And you cannot stop companies from competing or demand that other services be cross-subsidized.

 

Mezeron put their toe in the water nearly a year ago with the introduction of the small container ship Ingeborg Pilot, which intitially worked out of Ramsey, but then moved to a more visible position in Douglas.

 

This obviously only took a small proportion of the Racket's freight initially, but surely it could be seen that if this business took off, then bigger competition would follow.

 

The amazing thing is that there seems to have been little or no reaction from the Racket until after that bigger competition arrived.

 

Spitting out the dummy is not going to assist anyone.

[John Wright]

User agreement in a nutshell

 

For near exclusive use of the linkspans, at a fee, the SPCo is obliged to provide

 

• Inbound freight capacity, 7,800 lane metres per week.

• Service to north-west UK ports, 936 return sailings per year.

• Summer-period frequency to the Liverpool port range, a daily service from April to the third week in October.

• Services to the east coast of Ireland, 63 return sailings per year

Standard Fares are based on 1995 levels adjusted by Manx RPI less 0.5%.

 

Of course RPI in IOM has increased at a much faster rate than UK, in [part brought about by higher prices for consumer priducts in part caused by high freight charges. Interestingly if there is now a freight price war and reductions are passed on by retailers that will reduce th RPI increase and may limit full fare price rises.

 

Oh irony!

[Lost Login]

I think you will find if the SP went tits up the craft would revert to the hands of the government as unless I am wrong they are the surety for the loan so therefore could be seized,

 

Why do you think that the loans were from the IoM Government?

[Blade Runner]

From what I have heard and read today it seems to me the the IOM SP are going down the route of arguing that when they signed the User Agreement it was anticipated that they would not have a competitor in Freight on any kind of large scale.

 

From what is coming out of IOM Gov they sound to me that they are willing to listen to SP and see what they can do about this new service.

 

I have not seen the details of the UA but unless it specifically says they have a monopoly on freight through the Port of Douglas what can they do other than plead poverty and their "History" with the Island

 

If they (SP) signed up to an agreement that is now no longer any good for them, to me that is their mistake. The answer will be in the small print of the UA, I would say this will earn a few lawyers a lot of money.

 

I cant see IOM Gov "leaning" on Mezzaron, they are too big for that to happen.

 

Interesting times indeed...........

[P.K.]

Situations like this are ALWAYS down to the numbers. And it may be that there simply isn't the business available to run two rival operations.

 

The IOMSP bottom line has been pretty healthy for some time otherwise there would be no investment. But I should imagine they will suddenly get very concerned about keeping their powder dry commercial confidentiality. I would be very interested in the IOMSP cost base vs freight and passenger revenue correlated to the User Agreement which I believe has clauses on minimum service levels?

 

However don't all cheer up at the thought of the SP getting their comeuppance. If it does get down and dirty it will be very messy with passenger service levels the only certain casualty.

[Knoxville]

How much does it cost SP to sail to:

 

Hayshem and back

 

Liverpool and back

 

Belfast and back

 

Dublin and back

 

 

I remember a while ago when Manx Airlines was sold, that the Government should have taken it over. Should they not do the same with the SP?

[Blade Runner]

I remember a while ago when Manx Airlines was sold, that the Government should have taken it over. Should they not do the same with the SP?

 

I used to think that but looking at all other things IOM GOV run it would be a disaster. One of the main problems would be the employment terms, likely to be the same as all other IOM Gov, Public Servants with the huge costs of gold plated pensions just one of the reasons that they could not run it cheaply.

[pongo]

I remember a while ago when Manx Airlines was sold, that the Government should have taken it over. Should they not do the same with the SP?

 

Why should the govt have "taken over" Manx Airlines ? There is still a perfectly adequate air service for the IOM. Much better than many equivalent tiny islands enjoy. Air services everywhere are always in flux. With luck Easy Jet will expand their timetable sooner or later. These things come and go according to the economy of air travel at any particular time. It has been like that for as long as air travel has existed. The Heathrow route would not have been sustainable anyhow (and Gatwick is more useful for most people).

 

There is no reason why there should not be free competition for freight/container traffic - a market which has grown significantly over recent years. No reason why freight traffic should have to cross subsidize passenger and vehicle services.

 

It really only comes down to whether vehicle traffic should be subsidised. There is a perfectly good passenger service out of Ronaldsway if people want cheap fares.

 

The user agreement was always a mess.

[cheeky boy]

Interestingly if there is now a freight price war and reductions are passed on by retailers that will reduce th RPI increase and may limit full fare price rises.

 

Oh irony!

 

 

It seems highly unlikely that Tesco etc. will drop their prices in line with any reduction in freight charges, more likely they will sit back and enjoy bigger profit margins

 

Also, if Dhole buy out the SPC they won't be able to operate the whole business on the thin margins they presently enjoy by operating one small cargo ship. So whoever ends up bringing in the baked beans we the consumers will still end up paying a premium