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Losing money on booze, new state ferries won't have bars aboard

Pat Forgey
Jae and Preston Cluff from Eagle River fish for flounder near the tip of the Homer Spit as the Alaska State Ferry Tustumena leaves Homer on its way to Seldovia. The ferry returned to Homer and then left for a trip to Kodiak and on out the Aleutian chain. Photo by Bob Hallinen / Anchorage Daily News

JUNEAU -- The one highway on which Alaskans have long been encouraged to drink while traveling is the Alaska Marine Highway, but budget cuts will eliminate that pastime for some -- and possibly all, eventually -- state ferry travelers.

On Alaska state ferries, the designated driver is a licensed vessel captain, but unfortunately for some bar patrons, the bar is costing the ferry system more than it’s bringing in.

Department of Transportation and Public Facilities says that given tight state funds, and the fact that intoxicated passengers can occasionally be a problem for ferry crews, bars can no longer be justified.

Consequently, three new vessels in the planning and design stages do not include bars. Whether future vessels serve liquor will be decided on a case-by-case basis, officials say.

Six of the system's larger ferries, including all of the mainline vessels, have traditionally had bars, said Jeremy Woodrow, spokesman for the Department of Transportation and Public Facilities. And they've long been popular with a segment of the traveling public.

"Having rode the ferries all my life, I know that people do enjoy the atmosphere in the bar,” he said.  “So that is a change."

The change is one more sign of the financial pressure the ferry system is under from state leaders, including Gov. Sean Parnell and key legislators. A growing unwillingness to subsidize ferry travel may also reflect the waning political influence of ferry-dependent coastal communities in favor of the more populous Anchorage and the Mat-Su Borough, members of the Marine Transportation Advisory Board have said.

More ferry reductions

Ferry officials say their budget this year was cut by $1 million, following a $3.5 million cut last year. They expect more cuts in the future. "The Legislature has sort of telegraphed to us they'd like to see further reductions next year," said Reuben Yost, deputy commissioner of the Department of Transportation, who oversees marine operations.  

So far, that’s mean cuts to travel agent commissions, this year's closure of ferry gift shops and cuts to employee travel and other measures.

The state recently completed negotiations with three ferry unions on new three-year contracts after ferry officials said legislators pushed for salary and other reductions.

The new deals call for zero percent increases in the first year, followed by a 1 percent increase and then a 2 percent increase. The new deals still must be approved union members and legislators.

Ferry riders can also expect to be hit with fare increases starting during the winter of 2015-2016, Yost and other transportation officials say. Eliminating bars from new ferries is part of a long-term plan, as it is likely to be years before the three new ferries are in service.

Transportation officials said they didn't know exactly how much the ferry bars cost, but elimination of the gift shops is expected to save $1 million annually.

A replacement vessel for the Tustumena, which serves Gulf of Alaska communities, is being designed without a bar, ferry planners say. At the same time, its restaurant is being replaced with a cafeteria. Ferry planner Christa Hagan said the possibility of serving beer and wine in the cafeteria remains under consideration.

Layoffs unlikely

In addition, two new Alaska-class ferries designed for operation in Lynn Canal between Juneau and Skagway, or elsewhere in Southeast, will not have bars. Those vessels will be designed as cheaper-to-operate "day boats" that will only do short runs and have less passenger demand for a bar.

Inlandboatmen's Union of the Pacific Regional Director Ricky Deising said he understands the ferry system can't justify running bars that are losing money, but his members will be sorry to see them go away.

"I know that we have members that really enjoy their jobs working as bartenders out there," he said.

As with current gift shop cashiers, bartenders could move to other ferry jobs and layoffs are unlikely, said union and ferry officials.

While it may seem as though selling alcohol to Alaskans would be a license to print money, the bars may seem more profitable than they actually are.

"While they do profit on selling liquor, the sales on the liquor are not enough to offset the labor cost of the bartender or the employee who is working there," he said.

Many Alaskans probably think the ferry bars are busier than they actually are, Woodrow said.

"A majority of people, when they do ride the ferry, it tends to be for certain events,” he said. “So they're on when the vessel is packed and the bar is packed. They see a lot of volume."

Running well short of capacity

One of the main missions of the ferry system is moving cargo, including mail, fish, and groceries to small communities, rather than passengers.

"A majority of time, those vessels aren't full -- or even half full," Woodrow said. Last year, Southeast ferries operated at 35 percent of passenger capacity and 65 percent of vehicle capacity – with the big Tustumena even worse at 23 percent and 56 percent.

Keeping the ferry system financially viable is more important than losing the convenience of a bar, said Robert Venables, chairman of the Marine Transportation Advisory Board.

"That particular amenity is not really a core part of running a ferry,” he said.  “It’s a nicety that we don't have the luxury of being able to afford much longer."

The small ferry LeConte once had a bar, but it was taken out several years ago. That ferry is so small that the bar was near dining and passenger areas, and there was a history of complaints about inebriated bar patrons. After considering a redesign, Alaska Marine Highway opted to simply do away with the bar.

Contact Pat Forgey at pat@alaskadispatch.com.