Ferry firms sail into rocky waters as fuel prices rise
CEO of O'Brien Ferry Company Liam O'Brien pictured at the Ferry Port, Doolin Pier, Clare on Tuesday.
Liam O’Brien, CEO of Doolin Ferry Company, is at the helm of a vastly different business to what his father created over 50 years ago.
At 18 years of age, Bill O’Brien, the patriarch of the business, started transporting handfuls of people to nearby islands in a boat that took an hour to an hour and 30 minutes to complete the journey, said his son.
Bill O’Brien substantially grew the company before Liam took over and expanded it further. The company now has six vessels on the Atlantic and transport between 1,500 and 2,000 people to the Aran Islands in under half an hour a day during the operational season.
As the business changed over the years, so did the economic environment it operates in. The most notable recent challenge has been the cost of fuel.
“Our biggest cost, our biggest polluter, our biggest problem is fuel,” said Mr O’Brien.
In 2020, Mr O’Brien paid 23 cents for a litre of fuel. In 2021, he paid 64 cents a litre. In October, he paid €1.32 a litre.
Mr O’Brien said 2020 was an “anomaly” as lockdowns led to plummeting demand for fuel, making it cheaper to buy. However, the cost retuned to around pre-pandemic levels last year before surging recently due to inflation and the war in Ukraine damaging supply chains.
Mr O’Brien said he is currently running the boats at the most economical speed while also trying to cut back to be more energy conscious.
Firms like Doolin Ferry Company could face even greater problems when it comes to fuel as further supply chain constraints loom following shipping disruptions and worker strikes impacting production at refineries across Europe.
The soaring cost of fuel was also part of the why former CEO of Liscannor Ferry Company, also known as Doolin2Aran Ferries, and Clare native Eugene Garrihy decided to sell to his long-time business rival Mr O’Brian earlier this year.
Mr Garrihy said it was the right time to sell as “the outbreak of war in Ukraine and the resulting increase in the cost of diesel fuel” led to cost pressures for the business.
Informal discussions between the two Clare men Mr O’Brien and Mr Garrihy began in April and the deal was completed at the end of June for an undisclosed sum.
Mr O’Brien said the company was “well paid”. The acquisition brought an end to a bitter rivalry that was renowned between the two ferry firms.
“It was not a friendly atmosphere out there. It was vicious. There would have been even division maybe within the community of picking one side over the other,” said Mr O’Brien.
Mr O’Brien said that competition between the two at times could be “stifling”, especially when the Doolin pier was rebuilt a few years ago which created space for ferry companies to grow their fleets.
“There was almost an arms race on between companies and we ended up replenishing the fleet to a point. But at the same time, they're not cheap, they are millions and millions a euro,” said Mr O’Brien.
Mr Garrihy, for example, had invested €3m in a new 200-seater ferry post-Covid before selling the company.
Mr O’Brien said that Covid-19 put things into perspective and “relations got much better between the two companies”.
“I didn't speak to them for the best part of six or seven years before I approached them,” he said.
“Our companies were in a very tough position because no one was travelling anywhere and we both had invested heavily in vessels,” said Mr O’Brien.
The deal was mutually beneficial as absorbing Mr Garrihy’s fleet and staff led to Mr O’Brien substantially growing his business while Mr Garrihy was able to focus on his other business Dublin Bay Cruises.
“It was many years ago I heard that one should never let emotion get in the way of a good business deal,” said Mr Garrihy.
“The price and the deal that was agreed between both parties was viewed by our family as a once in a lifetime opportunity and one that must be concluded as we had other businesses to run,” he added.
Liscannor Ferry Company had built up its reputation with its routes to the Cliffs of Moher. Although Mr O’Brien was providing similar routes, his customer base doubled after the deal to around 260,000 during their operational months between March and October.
“Many companies tried that in the past, but it never succeeded. But they really pushed it and built it into a strong business,” said O’Brien.
Mr O’Brien is still grappling with the impact of the pandemic as well as the cost of the recent deal and the price hikes in diesel.
“It put us back two years,” said Mr O’Brien about the pandemic.
He said that traffic has not yet returned to post Covid levels either, despite being busier this year.
He said that after the acquisition of Mr Garrihy’s company it was hard to gauge if the same level of people are travelling because he was absorbed Mr Garrihy’s customers as well as providing trips to existing customers.
However, he is optimistic about the future of the tourism industry in Ireland.
“I think there's going to be a tourism boom. It's already happening, I think next year is going to be a really, really busy year for Ireland,” said Mr O’Brien.
Meanwhile, Doolin Ferry Company faces other issues in addition to the cost of fuel, some of which Bill once faced as well. The challenge of succession is a worry for many family businesses, and it is one that has crossed Liam’s mind.
“It’s funny how sometimes kids don't follow their parents,” said Mr O’Brien.
Although he followed in his father’s footsteps, he does not think his own son, or his two daughters will do the same.
“I would really like if one of them would take it on. But I would 100% not push them into it. Not because it's a bad business to be in, but I really believe that you need to be able to be happy in what you're doing,” said Mr O’Brien.
Mr O’Brien said that being happy in your business leads to better customer engagement as well.
“I think, like the traditional Irish publican, people want to be able to meet the owner. People enjoy going down to the pier if they have any issues and get to talk to either myself or my father,” he said.
For now, even after the acquisition of his rival’s business, Mr O’Brien does not plan on just going with the flow.
“I don't want to rest on my laurels. I've noticed companies in the past, once they don’t have as much competition they sit back,” he added.
Mr O’Brien said his main goal now is to improve and expand marketing in Ireland and overseas.
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