Nankai Electric Railway announced on March 30 its decision to withdraw from the ferry industry currently operated by its subsidiary Nankai Ferry.
The company intends to terminate the 61-kilometre route between Wakayama and Tokushima by the end of March 2028.
The subsidiary was established in 1975 and has connected the Wakayama and Tokushima prefectures for five decades. Although the target date is set for two years away, the parent company indicated the withdrawal could be accelerated if ageing equipment or staffing shortages, “compromise operational safety.”
Nankai explained that significant shifts in regional transport occurred following the 1998 opening of the Akashi Kaikyo Bridge, which prompted a move toward land-based travel via the Kobe-Awaji-Naruto Expressway.
A shrinking and ageing population has further reduced passenger numbers, while the Covid-19 pandemic caused a sharp decline in revenue starting in the 2020 fiscal year, it added.
Despite implementing various recovery measures and receiving local government support, high fuel prices have prevented a substantial turnaround in the business. Nankai Electric Railway reported that the subsidiary has carried a heavy debt burden and remained in a state of negative net worth since fiscal 2021.
The company noted that one of its vessels, the Ferry Katsuragi is currently 26 years old and requires replacement due to its deteriorating condition, but funding a new vessel is financially unfeasible.
While the group considered continuing operations with only the Ferry Ai, it ultimately concluded that, "efficient management and operation is impossible".
For the 2024 fiscal year, Nankai Ferry recorded operating revenue of JPY2.13 billion ($14.11 million) alongside an operating loss of JPY9 million. Total passenger volume for the same period was 357,000, with car and cargo shipments reaching 90,000 and 25,000 units respectively.
