Costs of running interisland ferry service for Maui County clearer as study completed, could come up in budget talks

Maui County would need a subsidy of nearly $2 million annually to operate an interisland ferry system and more than $46 million to purchase and expand the fleet owned by the company that runs routes between Maui and Lānaʻi, according to early estimates.

The potential costs of taking over the current operations and adding a route to Molokaʻi are becoming clearer with the completion of a $300,000 feasibility study that is set to be transmitted today to the County Council.

“I’ve got to say we’re the closest we’ve ever been to the county owning a ferry,” said County Council Member Gabe Johnson, who holds the Lānaʻi residency seat and has been working to make this proposal a reality since he took office in 2020.

Johnson said on Thursday the council will discuss the study when it comes up during the upcoming fiscal year budget meetings that begin in April, but he did not have a specific date.

The feasibility study was sponsored by the County of Maui Department of Transportation and was conducted by Seattle-based KPFF Waterfront Services and DanTec Associates.

Andy Bennett of KPFF Waterfront Services and Dan Levy of DanTec Associates shared some of their recommendations, including community input from meetings last summer, during a Feb. 20 meeting of the Agriculture, Diversification, Environment, & Public Transportation Committee, which Johnson chairs.

The presentation to the committee showed a 10-year forecast for 2026 to 2036 that estimated ferry fare revenues to be $68.6 million, with estimated operations expenditures of $87.2 million — meaning the annual subsidy needed to run the ferry system would be about $1.8 million to $1.9 million.

Currently, the only ferry service available in Maui County is run by the private company Expeditions, which provides three round-trips between Mānele Small Boat Harbor on Lānaʻi and Mā‘alaea Harbor on Maui.

Kauanoe Batangan, who recently became the executive director of the Maui Metropolitan Planning Organization, said the proposed plan is for Maui County is to buy three Expeditions vessels, make some modifications to them, and then contract out operations and maintenance. With the county owning the service, it opens up more avenues for obtaining federal funding to buy boats.

Expeditions 6, the main boat used currently for scheduled runs between Mā‘alaea Harbor and Lānaʻi, would then become part of a five-vessel fleet that would include two more boats for each the Lānaʻi and Molokaʻi routes.

The additional capital costs to build the interisland fleet was estimated to be $46.3 million. The breakdown:

• $4.8 million to acquire Expeditions’ three boats 4, 5 and 6
• $16.3 million for two new Lānaʻi vessels to eventually replace Expeditions 4, a 65-foot power catamaran and Expeditions 5, a 55-foot power catamaran, that are currently used mainly for charter needs, many of those trips being for construction workers and their equipment going back and forth from Maui to Lānaʻi, according to Johnson.
• $3.2 million for a renovation to Expeditions 6, a 75-foot powerboat, to be done in 2031.
• $20.6 million for designing and purchasing two new vessels to run the Moloka’i route, which requires sturdier vessels due to the often rough conditions of the Pailolo Channel
• $1.3 million in other capital investments

Batangan, who was deputy director of transportation for the county and continues to help with the project, said Expeditions “seems willing to work with us.”

Expeditions president Captain Bill Caldwell backed the proposal during the Feb. 20 meeting.

“I do support this excellent feasibility study that has been done,” Caldwell said during public testimony. “There’s a lot of work to be done and a lot of stuff to discuss between the two parties. But we’re willing, we’re able, we’ve done it for over 35 years. We know what’s happening with facilities, vessels, weather, whales, everything.”

Caldwell declined to comment further to Hawaiʻi Journalism Initiative at this time.

Johnson said it “would be like Expeditions 2.0.” There would be some reshuffling within the Expeditions current company.

The county had issued requests for information to see if any ferry operators were willing and able to provide ferry services while the county sets up its own operations.

Expeditions was the only company that responded it could provide service between Maui and Lānaʻi, while no operators responded it could immediately provide service between Maui and Molokaʻi, according to the Feb. 20 presentation.

For residents of the county’s two remote islands, ferry service is important for reliable and affordable travel to Maui for purchasing goods and accessing necessary services, including medical and dental appointments. The ferry service also is needed for many other reasons, including youth participating in sports, said high school basketball coach Mary Lou Kaukeano.

Lānaʻi ridership numbers are estimated to be 88,000 annually, while the Molokaʻi ridership estimate is 38,000 annually, according to the Feb. 20 presentation. Lānaʻi traditionally has had more demand, primarily due to its robust tourism industry.

Currently, the only transportation to and from Molokaʻi is Mokulele Airlines, which has struggled to provide reliable service and meet the community needs.

“I want to protect my community as much as I can from the fluctuating costs of airlines, all the shenanigans, so if the county owns the ferry then we can be service driven instead of just profit driven like the rest of a lot of our transportation systems,” Johnson said. “It’s a lifeline for my community.”

Maui County Council Member Keani Rawlins-Fernandez, who holds the Molokaʻi residency seat, said: “While adding ferry service is not a panacea, offering multiple modes of transportation off any island is a matter of safety and security, as we’ve seen the severe impact the entire Mokulele fleet being grounded for over a week had on our community this past January.”

There are three proposed routes: Kaunakakai Small Boat Harbor on Molokaʻi to Lahaina Harbor, and Mānele Small Boat Harbor on Lānaʻi to Māʻalaea and Lahaina.

The ferry routes between Lānaʻi and either of Maui’s harbors are shorter, take less time and usually have smoother water conditions, than the route between Maui and Molokaʻi.

“A 2-hour ferry ride to Lahaina is longer and takes more of a toll on one’s body than a 30-minute plane ride to Kahului, so the tradeoff for choosing the ferry over the plane would require significant cost savings and it may be more attractive to those whose final destination is West Maui, rather than central (Maui),” Rawlins-Fernandez added.

Routes to Lahaina Harbor, which has been closed since August 2023 due to severe damage caused by the Lahaina wildfire, cannot begin until the estimated $25 million to $30 million restoration is completed.

Batangan said the ferry system proposal is progressing well with feedback garnered last July and August during the first round of public engagement that he called a “listening tour.”

“We wanted to hear from the public what it is they wanted to see out of this,” Batangan said. “We took that information, used it to build out some concepts and then did a second round (in October) of public engagement in which we wanted their feedback on those service concepts.”

The County of Maui Department of Transportation took the rest of 2024 to flesh out recommended service concepts that were presented to the Agriculture, Diversification, Environment, & Public Transportation Committee. 

Batangan said the final feasibility study will include an assessment of the harbor infrastructure requirements, the vessel requirements, regulatory and permitting requirements, environmental constraints, ridership demand and suggested fare prices, financial analysis, and what the operation personnel impacts would be on the department of transportation.

“We are trying to get our study to the council before the mayor’s proposed budget so they would have time to consider our proposal,” Batangan said. “And then during the budget session, they will tell us what, if anything, they want us to move forward with.”

Johnson attended the National Association of Counties convention in March in Washington, D.C., where he spoke with Hawaiʻi U.S. senators Brian Schatz and Mazie Hirono and U.S congresswoman Jill Tokuda about the possible lines of federal funding to help offset the costs to Maui County.

“I had really good conversations with Jill Tokuda and she said when the county purchases the (Expeditions ferries), then the feds can come in and subsidize a new purchase of a vessel,” Johnson said. “That’s so important.”

Tokuda’s office did not respond to requests for comment from the Hawaiʻi Journalism Initiative.

Johnson said the Molokaʻi ferry would take three to five years to become operational because the vessel must be designed and built to handle the often rough conditions of the Pailolo Channel.

“It takes some time to build a boat … but the funding would be there from the feds because of what’s happening with Mokulele (Airlines) just being such a nightmare,” Johnson said. “Transportation for folks to go to get health care services is really key from a federal point of view.”

If the Lānaʻi ferries are purchased by the county from Expeditions, the county could start to run the route in about one year, after an environmental assessment is done.

Rawlins-Fernandez said with any ferry route, measures need to be in place to ensure invasive species do not get transferred from island to island.

The ferry service would continue to run while the environmental assessment is being conducted, Johnson said.

“We don’t want to interrupt the service at all,” he said, adding that the current Expeditions employees who want to continue working would be hired by the company the county contracts to run the service.

From the public meetings, Johnson said Lānaʻi residents expressed they wanted maybe one more extra run between Maui and Lānaʻi for a total of four roundtrips daily, while Molokaʻi residents seemed to want one run in the morning and one run in the afternoon.

“The ferry fleet has to be a fleet for Lānaʻi and a fleet for Molokaʻi,” Johnson said.

Ferry service between Maui and Moloka‘i ended in 2016 due to declining ridership, competition from federally subsidized airlines and government regulations. 

“A Molokaʻi-Maui ferry route would be most beneficial to those who regularly commute for work between islands, student athletics and extracurricular activities, and as a secondary mode of transportation when flights are not available,” Rawlins-Fernandez said.

But she added: “Most Molokaʻi residents choose Oʻahu-based health care, so the ferry would not alleviate that need as much.” 

Batangan said many residents of Molokaʻi and Lānaʻi expressed that they wanted “to make sure that the people of Lahaina are willing to welcome the service to their community again.”

Johnson said there would be no service to Lahaina for the next three to five years, but long-term service could begin after rebuilding has progressed significantly and “Lahaina reopens.”

The County Council will receive Mayor Richard Bissen’s proposed budget for fiscal year 2025-26 on March 25, with discussions beginning in April.

“We will have that feasibility study. We will have all our ducks in a row,” Johnson said. “I’ve already heard from the mayor and they’ve already put in a certain amount of money into the budget for the ferry, but I don’t know the number. We’ll have to wait until March 25th.”

The county said it will not provide information about what is included in the budget until March 25.

But in his State of the County Address on March 7, Bissen said the Maui County ferry service feasibility study was launched “to explore expanded interisland travel options, strengthening connectivity between our islands.”

Laksmi Abraham, County Director of Communications and Government Affairs, said in a statement to the Hawaiʻi Journalism Initiative: “We recognize the significant challenges that our Molokaʻi and Lānaʻi residents face in accessing interisland transportation. Access to essential services, medical care, education and economic opportunities should not be a hardship for any of our communities, yet many on Molokaʻi and Lānaʻi continue to struggle with inconsistent and costly travel options.

“Our administration remains committed to working with state officials, transportation providers and community leaders to find sustainable solutions that ensure safe, reliable and affordable travel for all residents,” Abraham continued. “Our County Council will play a critical role in reviewing the feasibility study and deciding how we move forward.”