New Zealand's vital link

Interislander talks about its strategic investments
New Zealand's vital link

By Justin Merrigan |

Ferry services across Cook Strait between the North and South Islands of New Zealand are a strategic component of the country’s national transport system. This crossing is one of the country’s most iconic tourist experiences, its 92km passage boasting one of the most spectacular cruises in the world.

Interislander annually undertakes around 5,500 sailings across the Strait carrying approximately 785,000 passengers, 53,000 rail wagons, 73,000 trucks and 210,000 cars. The company provides a vital service linking the country, not just for the travelling public, but also for rail and commercial vehicle freight.

Formed by New Zealand Rail in 1962, the company had a brief period in private ownership when Toll NZ bought the railway company in 2004. Four years later the wheel had turned full circle with the New Zealand Government purchase of Toll NZ, including Interislander. Today the operator is part of KiwiRail.

Davis says public ownership of KiwiRail has been good for New Zealand. “Investment in the rail network to improve services has resulted in an increase in freight moving by rail including across Cook Strait. Investments have also been made in our ships with the lengthening of the Aratere in 2011 and the refurbishment of the Kaitaki last year. These investments demonstrate a commitment to Interislander to grow the business and ensure a sustainable business in the future.”

The Kaitaki was built in 1995 as Irish Ferries’ Isle of Innisfree and is chartered from the Irish Continental Group. She has operated in New Zealand for eight years and prior to that has spent time with Stena Line and also with P&O Ferries on the English Channel. “This is the first time the passenger area has been upgraded in the eight years since she was chartered by Interislander,” says Davis. “It was long overdue – the décor was dated and didn’t have anything to support the New Zealand feel of Interislander’s brand.

“Having opted to keep Kaitaki, we committed to upgrade the passenger accommodation ourselves. Customer satisfaction is all-important and was the main driver behind the refit. Fashions change and public tastes with them. We wanted to make sure that the new-look Kaitaki captured these changes while also reflecting more faithfully Interislander’s uniquely New Zealand brand values.”

Experience from other ferry operators has contributed to the Kaitaki’s new interior design. “The project was delivered by MJM, who have international experience with ferries and cruise ships. They have done an outstanding job, which is confirmed by our crew and our passengers since the ship returned to service. Now that her passenger facilities are more modern and appealing, we are also expecting onboard spend per passenger to increase.”

Davis knew it was important that the crew was involved in the project. “Their input has proved particularly valuable since it was based on their own hands-on experience. We took onboard a number of their ideas and the final designs show the benefits of this inclusive approach.”

In spite of difficult trading conditions during the past financial year, Interislander’s operating earnings were over NZ$24.3 million – up almost NZ$4 million over the previous year. With the refit complete, the company is in a position to grow the business even further.

“Interislander is no different from any other business in deciding whether to invest and what to invest in for our future,” says Davis. “KiwiRail operates as a commercial entity and alternative strategies are assessed to consider what will provide the required services to the freight and passenger markets most efficiently and sustainably.

“The passenger market has undergone significant change in the last ten years with competition from airlines on interisland routes and also very competitive pricing to alternative destinations. Interisland travel competes for the obvious disposable travel budget but also for the discretionary household budget against all the other choices a consumer has to consider. The most significant impact has been in the decline of foot passengers who can fly while vehicle passenger volumes continue to grow.”

Interislander recently suffered a perfect storm in the withdrawal of a key ship just before the height of the season. Thomas Davis and his team had to act quickly and in the full glare of a media spotlight.

“Initially we gave priority to our freight customers who travel with us every day and passengers who had bookings. Our schedule was changed to ensure we provided capacity at the most important times for our customers. Our reservations system was shut while we rebooked passengers from cancelled sailings. As the Aratere is a rail ship an intermodal operation was established to allow containerised rail freight to move on our ro-pax ship, Kaitaki.” To ensure adequate capacity for passengers during the peak season the company scheduled extra night sailings of the Kaitaki for passengers.

This article appeared in the Spring/Summer 2014 edition of International Cruise & Ferry Review. To read the full article, you can subscribe to the magazine in printed or digital formats.

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