In an unprecedented mid-season development, the three passenger ferry lines serving Mackinac Island raised the price of their round-trip adult tickets by one dollar and Star Line has reduced its boat schedule, while Arnold Transit Company and Shepler’s Mackinac Island Ferry remain unchanged, for now. Throughout the summer, the boat lines have experienced a gradual increase in fuel prices, but since Hurricane Katrina, prices climbed $1.38 per gallon, a 246 percent increase in the last 15 months.

The new $19 round-trip fare went into effect Wednesday, August 31, for Star Line, and September 1 for Arnold Line and Shepler’s. Boat schedules also have been affected, and more changes may come.

Crude oil production was disrupted at approximately nine oil refineries in the Gulf Coast region as Hurricane Katrina slammed into Louisiana in late August with 145-mile-per-hour winds. Gasoline prices in the Straits of Mackinac area and across the county have climbed to more than $3-per-gallon.

“There was nothing else we could do but raise the rate, other than go broke,” said Tom Pfeiffelmann, general manager at Star Line. He said Star Line boats consume approximately 2,800 gallons of fuel daily. In fact, Mr. Pfeiffelmann said in the last 15 months fuel prices have increased from 97-cents-per-gallon to $2.39-per-gallon. “Fuel this year, compared to last year, is almost $4,000 more a day, and that’s with no other income,” said Mr. Pfeiffelmann. “Fuel has become our main expense way above labor.”

“We were forced to do it. It’s just economics,” said Bob Brown, general manager of Arnold Transit Company, who agrees they, too, had no choice but to raise ticket prices. “This is the first time I can remember we’ve ever had to raise prices during the season,” he added.

Bill Shepler, owner of Shepler’s Mackinac Island Ferry said his boats use about 50 gallons of fuel running to the Island from Mackinaw City and, with fuel prices now up about $1.50 per gallon over last year, they had no choice but to increase the ticket price.

“We don’t want to do it, but we have no alternative,” he said. “It’s pure survival.”

Mr. Shepler echoes a similar example of the difficulties of running a business with a high overhead that includes the skyrocketing fuel costs and revenues based on a tourist market that has slowly been declining.

“In 2004,” he said, “fuel cost $100,000 more than the year before, and we burned less fuel.”

Star Line, this week, also has stopped service to its Rail Dock one week earlier than scheduled to help cut fuel costs.

“The$1 increase didn’t begin to cover our costs, but it helped,” said Mr. Pfeiffelmann, who said they had no choice but to reduce schedules. More changes are likely to come he said. They now plan to end their Mackinaw City service one week early, with the last day being October 23, when Grand Hotel closes. He said he did not know if additional changes would be made to the St. Ignace schedule.

Arnold Transit has not changed its schedule, though the company might consider looking at it if the fall season brings few visitors.

“We’re just going by what’s printed on our schedule at this time.” said Mr. Brown. “We’ll see what the traffic brings.”

Mr. Pfeiffelmann said that with gas prices up this year over 2004, and with a slow start to the season, Star Line reduced the number of boats traveling to the Island by running two boats on a four boat schedule, which, he added, has worked out well. Arnold Line made a similar move, reported Bob Brown, by not running two of its slower, steel-hulled ferries this season. The company is running one catamaran out of St. Ignace and two out of Mackinac City.

Bill Shepler said that, so far this year, his company is not cutting boat service, but it will be taking a strong look at reducing its schedule next year.

Star Line has cut fuel costs by only running three engines on a four-engine boat, while Shepler’s added sophisticated four-cylinder engines to its boats that has helped save 10 to 15 percent in fuel consumption.

When tourist traffic picked up this season, Mr. Pfeiffelmann said Star Line was having a pretty good year. Now with the high fuel prices and fewer visitors coming to the area as downstate schools begin classes, he figures he lost about $5,000 on Tuesday, August 30, with their largest load comprising only 39 people.

“You don’t think about it until you absorb it,” said Mr. Shepler, who’s experiencing a similar situation. “It’s pure profit that went out the exhaust pipe.”

Congressman Bart Stupak (D-Menominee) has been pressing the Bush administration to divert domestic supplies and he learned Wednesday, August 31, that President George W. Bush will release barrels of crude oil from the Strategic Petroleum Reserve (SPR) to help combat the latest record $70-per-barrel price.

He said he was happy with the decision to tap into the Strategic Petroleum Reserve to ease the pain at the pump. "With the Reserve at 98 percent capacity,” Mr. Stupak said, “we do not need to continue filling the SPR when families are paying astronomical prices for gas."

In addition to the increased fuel costs, the ferry lines received in March a franchise fee increase of 33-percent from the City of Mackinac Island. They now must pay two-percent of all gross ticket sales to the city, which could add $60,000 extra to city revenues. In 2004, the city received $174,257.96 from all three boat lines, collecting 1.5 percent of the gross passenger receipts. Earlier this year, the boat lines had asked for a reduction in that fee.

Though all three men acknowledge this was a difficult, no-choice business decision, they expressed frustration and empathy.

“I can’t see an end to it,” said Mr. Pfeiffelmann.

“We’re just feeling the ripple effect of the hurricane,” added Mr. Brown. “Imagine what it’s like down there.”