COURTESY HAWAII SUPERFERRY The $85 million Hawaii Superferry, seen here leaving Los Angeles earlier this week, will arrive tomorrow afternoon in Honolulu. The start of service for the Superferry will be in August, with no specific date set yet.

Superferry nears Hawaii

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The Hawaii Superferry will make its much-anticipated arrival in Hawaii waters tomorrow.

The Alakai arrives in a market transformed from three years ago, when its fares were approved. The interisland airfare war has slashed many ticket prices to far below what it would cost to travel on the vessel. But company executives say their business model isn't threatened.

Sometime tomorrow afternoon, the much-anticipated and oft-controversial Hawaii Superferry will get its first peek at Honolulu Harbor.

Seventeen days and 7,600 miles after it left the shipyard in Mobile, Ala., and three years after construction was begun, the $85 million Alakai will reach port at Pier 19.

When it arrives, though, it will be coming into a market far different from when its fares were approved by the state Public Utilities Commission three years ago. Back then, there was no interisland airfare war.

But even with airfare rates that frequently drop down as low as $19 one way -- if not lower -- Superferry officials said in an exclusive interview Wednesday night that they expect to be profitable within their first year of operation with a business model that is based on less than 50 percent utilization.

That would work out to an average per voyage of about 400 passengers and 110 to 120 vehicles of all sizes for the seven-day-a-week trip to Maui and the six-day-a-week trip to Kauai. The maximum capacities on the 350-foot vessel is 866 passengers and 282 cars.

"We'll be a profitable venture during our first year of operation -- just looking at the support that the community has, the excitement, not just from consumers but also from businesses," Chief Executive Officer John Garibaldi said. "A lot of businesses -- whether it be on a neighbor island or on Oahu -- are seeing this as a reach to the communities, giving their products out. The farmers on the neighbor islands are very excited. We have craftsmen who are very excited. Every day we learn of new uses of the ferry."

Garibaldi said commercial revenue will be about a third of the company's business and passengers will represent about two-thirds. Businesses won't be able to ship freight separately, as they can on Young Brothers, but they will be able to drive trucks or vans containing goods onto the ferry and transport them that way.

The start of service for the Superferry will be in August, but no specific date has been announced yet because of the training that is needed for the crew and other members of the expected 250-member work force. Likewise, the dates of the free community preview events on Oahu, Maui, Kauai and the Big Island are still to be announced, as is the date that reservations will be accepted.

Even though Garibaldi, a former chief financial officer at Hawaiian Airlines, said the Superferry isn't in competition with the airlines, he said the company has been in contact with all local carriers involving deals that would allow passengers to take the ferry one way and fly the other direction. He said any deals would be non-exclusive.

There won't be any rapidly changing fares, though, as Hawaii consumers have seen with the airlines. That's because any tariff change has to be approved by the PUC, he said.

"That's one of the predictable things with Hawaii Superferry," Garibaldi said. "We don't have fares than run from $39 up to $89. We have a very simple fare structure."

For the three-hour Maui and Kauai trips, that fare structure will be $52 for adults for travel on Tuesday through Thursday and $62 for Friday through Monday. Fourteen-day online advance purchases will be $44 and $54, respectively, and children ages 2 through 12, seniors 62 and over, and retired military will be $41 and $51. Children under two will be $17 regardless of day. Transporting a car or SUV one way will be $59 on off-peak days and $69 on peak days. Fares for Big Island trips, which will take four hours and 15 minutes, will be $10 more when a second vessel begins service there in early 2009.

"They're well into it," Garibaldi said of the builder Austal USA's construction of the second ship. "They're on track for completion at the end of 2008."

The privately held Superferry, which received no federal or state subsidies, did get a $140 million federal loan from the U.S. Maritime Administration. The remainder of its financing came from $90 million in private equity, primarily $80 million to $85 million from J.F. Lehman & Co., which invests primarily in marine and aerospace defense projects.

The end of the voyage tomorrow from Mobile will mark the beginning of a new mode of transportation for Hawaii consumers, businesses and visitors.

Roughly 30 years after the Seaflite ended three years of moving passengers between the island with hydrofoil ships, the larger Superferry's catamaran-style design and ride-motion stabilizer promise better reliability than its predecessor, as well as a smooth ride.

"We offer a total experience, things you just can't replicate in an airline model," Garibaldi said. "They're off competing seat per seat per seat, and we're really offering the experience that will really stand on its own two legs and really be a value to people who use her."

Terry O'Halloran, director of business development for the Superferry, said the "experience" of traveling on the ferry will come in several forms. Among those, he said, are three different food and beverage areas; newly released movies on flat-screen TVs; a keiki play area next to tables and leather sofas where the parents provide supervision; a Surf Break lanai that will show sporting events; and a Hahalua lounge that will offer a higher level of service, including beer and wine, and be available for a $20 upgrade. There also will be a place for people to plug in their computer and work.

"The ship is really designed to provide a lot of different opportunities depending what you want to do -- whether you want to be entertained, or take it easy or get some work done, or just have some time with the kids or family or friends," O'Halloran said.

Besides the amenities, there also is the view, Garibaldi said.

"You can look outside and enjoy the beauty of the islands," he said. "One of the most striking things will be when you go onboard and you're on either side of the vessel and you go to the center section of the vessel. That center is raised one foot, so if you look at it, every seat on the vessel has a great line-of-sight view outside the window. That's really showcasing Hawaii and the beauty we have of the water and the seascape and the landscape. That's something that's become very stunning to people."

To get to this point, the Superferry had to contend with opposition by environmentalists who were concerned about whale endangerment and the transportation of invasive species. Communities also were concerned about congestion at the ports.

Superferry officials say they have tried to address those concerns.

"I think a lot of the concern that some people have expressed are concerns about something that's new and different," O'Halloran said. "We've taken a lot of the environmental issues very seriously, and we've addressed them in our policies and procedures."

Superferry has taken steps to prevent vehicles from being brought on board caked with dirt that might harbor seeds, and will have boot brushes available at the terminals for passengers who might have been hiking.

"We're doing things like that because we do want to protect our environment," O'Halloran said. "That's something that's very important for us."

Garibaldi also said the Superferry has changed its schedules to avoid congestion at the ports.

"A lot of that feedback came through the informational briefings the last couple of years," he said. "We've taken those to heart and addressed them, and we'll continue to do that."

Viewing opportunities

Source: Hawaii Superferry