Hoverspeed
Hoverspeed was a ferry company that operated on the English Channel from 1981 until 2005. It was formed in 1981 by the merger of Seaspeed and Hoverlloyd. Its last owners were Sea Containers; the company ran a small fleet of two high-speed SeaCat catamaran ferries in its final year.
Hoverspeed played a part in developing the hovercraft, and ran six SR.N4 Mountbatten class hovercraft and one SEDAM N500 Naviplane. Hoverspeed last operated hovercraft on its Dover to Calais service. They were withdrawn on 1 October 2000 and Hoverspeed continued to use Seacat catamarans built by Incat.
History
Background and early attempts to consolidate operations
During the early 1970s, when both Hoverlloyd and Seaspeed were struggling to return a profit, the two operators had been in negotiations on a partnership to amalgamate operations. However, management at Hoverlloyd was not convinced the UK government would sanction any form of arrangement between Seaspeed and a foreign company. The situation was exacerbated when discussions became public knowledge and plans for a consortium were quickly abandoned.Loss-making company
In late 1981, when the two companies eventually merged, the situation was dire. Despite a valuation at £110 million, combined losses were £8 million with ticket prices 25 to 30% higher than the ferries. Under the terms of the merger, Hoverspeed was also under obligation to accept the two French hovercraft in exchange for a 10% participation in share capital by French state-owned SNCF. The new company was spearheaded by Gerry Draper, new Chief Executive and a former marketing director at British Airways. Draper had been involved in filling empty passenger seats aboard the new Boeing 747 jumbo jets in the early 1970s when IATA regulations prohibited discounting. He was also successful in turning Concorde services profitable.Nevertheless, a number of early decisions plagued the new company. First, Hoverspeed inherited an antiquated reservation system which was inadequate, resulting in potential travellers having great difficulty in contacting Hoverspeed and many being told crossings were fully booked when they were not. This necessitated the reversion to a very basic manual reservation system to try to cope with demand. In 1982, loss income was estimated at between £3 million and £4 million. Second, excess capacity drove profit margins down. The most damaging mistake was to increase the number of crossings operated, over 10,000 in 1982, which did not match demand and the decision to briefly re-open the Ramsgate route for the summer season which was counter-productive. Third, parity pricing continued with ferry operators, even during peak season. This was a source of concern since 70% of the turnover was generated during the summer season between mid-June and mid-September.
Despite carrying 2.5 million passengers and 400,000 vehicles, a 21% market share, with 35% fewer flights and 250 staff made redundant, the new entity continued to register losses with £5.5 million for the year 1982, £3.5 million in 1983. The new French hovercraft, the N500, achieved only 60% reliability and did not meet ride comfort or control standards. It was eventually broken up for spares and scraps. The SR.N4 craft, moreover, could not accommodate the recently introduced double-deck and one-and-a-half deck coaches and this part of the market was lost. By 1984, the company was near collapse.
Management buy-out
In February 1984, the UK government refused to provide further guaranteed loans, British Rail sold its 50% ownership which it had retained in the company for a nominal sum of £1 to a syndicate consortium of 5 directors. Thus, Hoverspeed was effectively given away to its own management and was wholly owned within the private sector backed by merchant bank Kleinwort Benson providing guarantees and underwriting the cash needed to operate via NatWest.| Year | Turnover | Profit/Loss | Margin of Profit |
| 1984 | £28,590,000 | ||
| 1985 | £33,083,000 | £194,000 | 0.5% |
| 1986 | £34,698,000 | £625,000 | 1.8% |
| 1987 | £42,334,000 | £1,637,000 | 3.8% |
| 1988 | £44,062,000 | £4,775,000 | 10.8% |
| 1989 | £46,070,000 | £2,490,000 | 5.4% |
| 1990 | £49,121,000 |
The company immediately adopted premium instead of parity pricing, justified on the grounds that a faster service was expected to be more expensive. An aggressive advertising campaign was mounted against the ferries and more effort was made to target fares accurately. For 1984, the company made a loss of £621,000. Its performance went up with a pre-tax profit of £194,000 for 1985 with an increase in US passengers. This figure rose to £625,000 in 1986.
Purchase by British Ferries Ltd
Ripe for sale, in February 1986, Hoverspeed was sold by the management consortium to British Ferries owned by Sea Containers, a transport group engaged in marine container leasing, manufacturing, depot and logistics operations, railways operator, ferry operator and leisure industry investor for a sum of £5 million, each syndicate making a profit of £600,000. Large financial gains made by former managers of British Rail was to become a feature of rail privatization.In 1987, Hoverspeed returned a profit of £1.6 million with a turnover of £42.3 million per year and £4.7 million in 1988 and a turnover of £44 million per year.
Being part of a larger shipping company allowed fresh re-capitalization, cheaper fuel as well as access to legal services. With the reduced fleet of hovercraft aging, it also permitted capital investment into more fuel efficient vessels with the first SeaCat catamaran services introduced in 1991 and larger Super SeaCats in 1997, the latter to achieve economies of scale in the face of stiff competition from the Channel Tunnel and the ferry companies.
Final Years
After ten months of operation, it was reported that the Ramsgate-based high speed operations of Holyman Sally Ferries would cease due to the route not being financially viable. Majority shareholder Holyman announced that they would close the route and instead form a joint venture with Hoverspeed, moving their two vessels; Diamant and Rapide to operate from Dover to Ostend from March 1998 as Holyman Hoverspeed Ltd. Holyman sold their 50% stake in Holyman Hoverspeed to Sea Containers in August 1999, bringing the route and vessels under full Hoverspeed control.Closure
After sustaining losses annually since 1995 it was clear, by the early 2000s, Hoverspeed could no longer continue operating business-as-usual.- Competition from the Channel Tunnel
- End of duty-free sales
Consequently, Sea Containers announced it refused to support Hoverspeed’s losses on the English Channel and that they would cease operations on the Dover-Calais route, ending over 40 years of service.
Company wind-down and sale of assets
It was initially thought that both the 81m Seacats would move to Sea Containers Mediterranean services. However in March 2006 both the Seacat Rapide and Seacat Diamant were put up for sale by Sea Containers. Superseacat One which had operated for Hoverspeed on its now-closed Newhaven - Dieppe and Dover - Calais / Ostend fast ferry services was sold in April 2006 to Acciona Trasmediterránea and was renamed Almudaina Dos.Although the company ended Hovercraft service, they still retained ownership of the remaining 2 SR.N4s until 2006 when they were sold to Wensley Haydon-Baillie. In 2016, following a transfer of ownership of both land and the craft to the Homes and Communities Agency, a public campaign was launched to save one or both of the craft.
By summer 2016, it was established that The Princess Anne would be saved and refurbished as a permanent exhibit at the Hovercraft Museum. The fate of The Princess Margaret, which was not in such sound structural repair, was announced on 30 May 2018 - usable parts will be moved to The Princess Anne and the craft will be scrapped.
The closure of Hoverspeed left a single company in the United Kingdom still operating hovercraft flights, Hovertravel.
Fleet
| Ship | Built | In service | Tonnage | History |
| GH-2006 The Princess Margaret | 1968 | 1981-2000 | 320 | Scrapped at Lee-on-the-Solent in March 2018 |
| GH-2007 The Princess Anne | 1968 | 1981-2000 | 320 | On display at The Hovercraft Museum |
| GH-2004 Swift | 1969 | 1981-1991 | 180 | Scrapped at Lee-on-the-Solent in September 2004 |
| GH-2005 Sure | 1969 | 1981-1983 | 180 | Scrapped at Ramsgate Hoverport in 1983 |
| GH-2008 Sir Christopher | 1972 | 1981-1991 | 180 | Scrapped at Dover Hoverport in 1991 |
| GH-2054 The Prince Of Wales | 1977 | 1981-1991 | 200 | Destroyed by fire at Dover Hoverport in 1993 |
| BL.341.931 Ingénieur Jean Bertin | 1977 | 1983 | 260 | Scrapped at Boulogne Hoverport in 1985 |
| Hoverspeed Great Britain | 1990 | 1990-2004 | Holder of Hales Trophy 1990–1998. Currently in service as HSC High Speed Jet with Seajets | |
| Hoverspeed France SeaCat Boulogne SeaCat Isle of Man SeaCat Norge | 1991 | 1991-1992 1993-1994 1996, 1997-1998 | Currently in service as HSC Caldera Vista with Seajets | |
| Hoverspeed Belgium Hoverspeed Boulogne Seacat Danmark | 1991 | 1991-1993 1994 1997 2000-2003 | Currently in service as HSC Atlantic Express with Colonia Express | |
| Seacat Tasmania SeaCat Calais | 1990 | 1992 1993, 1999 | Currently in service as HSC Cat with Seajets | |
| Seacat Scotland | 1992 | 1992 | Currently in service as HSC Naxos Jet with Seajets | |
| Superseacat One | 1997 | 2000-2004 | Currently in service as HSC Speedrunner Jet II with Seajets | |
| Superseacat Two | 1997 | 1997-1998, 1999-2000, 2003 | Currently in service as HSC Hellenic Highspeed with Africa Morocco Link | |
| Diamant | 1996 | 1998-2005 | Currently in service as Jaume III with Baleària | |
| Rapide | 1996 | 1998-2001, 2005 | Currently in service as Jaume II with Baleària Caribbean | |
| Superseacat Three | 1999 | 2001 | Currently in service as HSC Speedrunner Jet with Seajets |