The public can weigh in next month on whether state regulators should approve the proposed 37% increase.

After years of financial uncertainty, a ferry service that provides a vital link for Lanai residents traveling to and from Maui intends to raise the price of a ticket to fund the maintenance of its aging fleet, buy a new vessel and cover increasing labor and fuel costs.

Maui County

Expeditions, the Maui-Lanai passenger ferry, has proposed a 37% across-the-board ticket price increase, which would hike kamaaina fare to $34.25 for adults and $13.70 for children, seniors and community groups. Non-resident ticket prices would rise to $41.10 for adults and $27.40 for children.

The company has not increased its rates since 2008. Child, senior and group rates have not changed since 1990.

If the Hawaii Public Utilities Commission approves the rate increases, higher revenues would simply allow the public ferry service to continue to function, according to the May 12 application filed by Hone Heke Corporation, which operates the Expeditions ferry.

The Lanai-Maui passenger ferry service is looking to raise rates to continue operations. (Marina Riker/Civil Beat/2023)

Some Lanai residents, including those on fixed incomes, say they’re concerned about having to shoulder higher ticket prices. More than 9% of residents in Lanai City, a former plantation town and the island’s main residential area, live in poverty. The average income is roughly $35,000, according to U.S. Census data.

But the ferry company said in its application that there aren’t any other options.

“Every single cost associated with running a ferry business — like wages and benefits, insurance, fuel and maintenance — have gone up,” Hone Heke President and CEO Bill Caldwell said in the application. “Yet our prices have not in over 15 years. Unfortunately, this is not sustainable.”

Rather than implementing a 37% fare increase for all ferry passengers, Pulama Lanai President Kurt Matsumoto suggested in an April letter to state regulators that the company consider increasing non-kamaaina fare higher in order to support lower kamaaina rates. 

But Matsumoto also expressed support for higher ticket prices to ensure that an essential mode of transportation can continue operating.

Chief Operating Officer of Pulama Lana'i Kurt Matsumoto.
Pulama Lanai Chief Operating Officer Kurt Matsumoto wrote a letter of support for the ferry ticket price increase to the Hawaii Public Utilities Commission. (Cory Lum/Civil Beat/2019)

The ferry makes eight trips a day between Lahaina Small Boat Harbor on Maui and Manele Small Boat Harbor on Lanai, carrying roughly 175,000 passengers a year. 

While some Lanai residents travel to Maui for entertainment options, many depend on the ferry to reach Maui-based doctors, veterinarians, chiropractors, family members and jobs.

A pair of public hearings hosted by the PUC will take place next month. The first is at 6 p.m. on Aug. 24 at the Lahaina Intermediate School cafeteria, and the next is at 3:30 p.m. on Aug. 25 at the Lanai High & Elementary School cafeteria.

Lisa Engebretsen, an attorney for the PUC, said she anticipates regulators will make a decision on the rate increase application by the end of the year.

The Lahaina-based company has explored alternatives to raising ticket prices, including selling the ferry service. 

Maui County is considering buying it. The county budget for fiscal year 2024, which started July 1, includes $300,000 for a feasibility study on the operation of a county-owned ferry. 

The study could lay the groundwork to justify a public purchase of the ferry, something Maui County Councilman Gabe Johnson, who lives on Lanai, said he supports as a mechanism to keep the ferry affordable. If the county owned the ferry, Johnson said, it could fund upgrades, repairs and competitive wages by tapping into outside revenue streams. 

Maui County Councilman Gabe Johnson

Ultimately, the Expeditions board of directors determined that preserving the profitability of the business through fare hikes is the best way to safeguard the reliability of a service that Lanai residents use to access jobs and medical appointments, the application says. 

The importance of the private ferry service has been underscored in recent years by the reduced number of commercial airlines that continue to serve Lanai.

Mokulele Airlines is the only public airline still servicing the Pineapple Isle, putting a squeeze on last-minute travel. In recent months residents have complained that the airline’s nine-passenger planes aren’t sufficient to meet resident demand for interisland travel.

The ferry is the only other alternative for off-island travel. While its route is limited to the roughly one-hour, 17-mile crossing of the Auau Channel, it’s more affordable than an airline ticket.

A one-way ferry ticket for a kamaaina adult currently costs $25. Kamaaina tickets for seniors and children are $10. This compares to a one-way airplane ticket from Lanai to Maui, which starts at $74 on Mokulele Airlines.

Civil Beat’s coverage of Maui County is supported in part by grants from the Nuestro Futuro Foundation.

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