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The company that owns the NYC Ferry is filing for bankruptcy

by Staff

The company that runs the NYC Ferry service filed for bankruptcy on Wednesday despite breaking ridership records last year.

The 100-year-old cruise operator said the financial filing will not affect NYC Ferry service. The company’s contract with the city to run the system was renewed for another five years in 2023.

The bankruptcy specifically pertains to just one of Hornblower’s smaller lines – American Queen Voyages, an overnight riverboat cruise business that ceased operations on Tuesday, pending a sale or a shutdown. Hornblower said that American Queen Voyages was lagging in performance, and had not been able to bounce back after the pandemic.

“This will not affect NYC Ferry service whatsoever – in fact, this deal injects new capital into the parent company, while eliminating debt unrelated to ferry operations, which will allow the system to continue its record growth across the five boroughs,” said Hornblower CEO Kevin Rabbitt.

The bankruptcy deal’s fundamentals include an injection of $121 million in new financing with about $720 million in total debt reduction, which is tied mostly to its American Queen Voyages line. The new financing will “support ongoing operations and total debt reduction,” but all other operations outside of American Queen Voyages will continue business as usual.

“There will be no disruptions to the system and NYC Ferry riders will continue to receive the same exceptional service reliability and convenience when riding,” said Jeff Holmes, a spokesperson for the NYC Economic Development Corporation.

Hornblower operates both land and sea trips in more than 100 countries and 125 U.S. cities. The San Francisco-based company has been running the NYC Ferry system and its route expansion since 2016. The NYC Ferry’s original six-year contract cost $325 million plus subsidies of $10 million to 20 million per year. The city renewed its contract with Hornblower for $405 million for another five years in 2023.

Ridership broke records and surpassed pre-pandemic levels last year, with fare revenue up more than $6 million. According to 2021 data, the average subsidies per trip were nearly $10 plus riders paid $4 per trip. The EDC said it expects subsidies to reduce by nearly a third by next year.

But NYC Ferry’s service operates deep in the red despite claims that it is unaffected by the recent bankruptcy filings. A city comptroller audit revealed that the city hid $224 million in additional costs from 2015 to 2021 to keep commuters afloat along its waterways – a sum that’s nearly half of the original cost estimate to run the ferry. The comptroller report also accused Hornblower of $12 million in overpayments.

‘One of the best things that they could have done’

Some riders told Gothamist they relied on the ferry to get to work, and they would even be willing to pay a little bit more if it meant ensuring it sticks around.

Rockaway Park resident Tara Aviles said she takes the Rockaway route to her Manhattan job at least three times a week, and she prefers it to the train.

“The trains are horrendous, so this ferry is like a godsend,” Villa said. “It’s safer, and it’s a faster commute, and it’s just, it’s like a smooth ride. I could fall asleep on the ferry and not worry about anything. Can’t fall asleep on the train, you gotta be very alert on the train.”

Aviles said it’s a service she relies on, and one she would be willing to pay more for to keep.

“I like the fare the way it is, because it’s pretty affordable. So if they didn’t raise it too much, it wouldn’t be so bad,” she said. It depends on how much… because I usually buy like a book of tickets, and that’s pretty affordable.”

Bronx resident Evelyn Torres was an early adopter of the ferry, taking the Soundview route to her job near Wall Street since it first opened. She also said she would be willing to pay slightly more for the service.

“This is one of the best things that they could have done. From the Bronx to New York. Before, I would have to take a bus and two trains to get here,” she said. “They already increased [the fare] once. It would be difficult, but you have to take the pros and cons. Convenience sometimes costs.”

This story has been updated with comment from riders.

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