ECONOMY

Ferries defy minister on fares

Greek coastal shipping companies decided to increase their economy class fares by 10 to 15 percent, as of today, in defiance of Merchant Marine Minister Manolis Kefaloyiannis who has warned of sanctions in case of violations. According to the ferry operators, increases in deck/economy class fares will be calculated on the operating costs of ships and the «particular characteristics» of each route, implying that they may vary between less than 10 percent to more than 15 percent. The possibility of fare increases starting today was laid out in a memorandum which ferry operators sent to the minister two days ago. They warned him that they expected immediate answers on the matter «since fares will be readjusted on July 1, 2004.» The ministry had not reacted until late last night, yet it is worth noting that Kefaloyiannis has repeatedly stated that no company has the right to decide illicit fare increases and that violators will face penalties in accordance with the law. In its memorandum, the Greek Coastal Shipowners Association (EEA), refers to four reasons which justify their demands for the readjustment of fare prices. They set out facts and figures, in relation to their operating costs, which they claim warrant 10 percent increases. They also claim that the recent rises of fuel and lubricant prices by 25 percent have led to operational costs increases amounting to 14.866 percent, meaning that comparable mean increases in fares are fully justified. The coastal shipping operators add that current fares are at least 62 percent lower than they would have been had they not been unfairly prohibited from raising them during the period 1993-2003 in line with increases in their operating costs, including fuel prices, insurance charges, and the maintenance of vessels, as well as wages and other costs. Finally, they note that based upon ratios of fare prices to distances traveled, rates are four times lower than those commonly charged elsewhere in the European Union. EEA President Stelios Sarris told Kathimerini that for the operation of vessels to be financially sustainable within the framework of the regulated market, fare increases of 15 percent are currently necessary. «Yet what we want from the Ministry of Merchant Marine is to free all economy class fares, so the market itself determines any increases. After all, the deregulation of fares does not always lead to increases; competition may also cause fares to drop,» Sarris said. Earlier this month, EEA warned the Merchant Marine Ministry to avoid any penal or administrative proceedings against any of its members over increased fares, threatening that this would lead to collective action. EEA insisted that after the end of regulation on January 1, the system for free provision of services and competition applies.