Young Brothers asks state for $25M in stimulus funds to overcome ‘dire’ financial situation
HONOLULU, Hawaii (HawaiiNewsNow) - Inter-island shipping company Young Brothers says it’s facing an “extremely dire” financial situation because of significant drops in cargo volumes amid the COVID-19 pandemic and is asking the state and the Public Utilities Commission for help to stay afloat.
Without assistance, the company said the Neighbor Islands might see some shipping disruptions.
Young Brothers said it’s seen a 30% drop in cargo volumes since the pandemic began. That’s translated into an $8 million loss through April. By the end of the year, that figure is expected to more than triple.
In a letter filed with the PUC on Tuesday, Young Brothers said its financial situation was “extremely dire” and indicated it will no longer get cash infusions from its parent company starting June 1. The company is asking the state for $25 million in federal stimulus funds to “sustain" operations through December.
“Until now, our parent company has graciously and generously covered our losses,” said Jay Ana, Young Brothers president, in a news release.
“But they are not in a position to continue covering the staggering COVID losses and have told us that we must now find other solutions. We must now find a cooperative solution with the state that allows YB to continue to operate.”
Last month, Young Brothers announced a host of measures aimed at streamlining operations and cutting costs, including a reduced sailing schedule, a hiring freeze and executive salary cuts.
Young Brothers is the only regularly scheduled shipping carrier authorized by the state to transport goods inter-island.
Maui County mayor Michael Victorino called the shipping company ‘the lifeline of the state of Hawaii’ and said residents on Maui, Molokai and Lanai depend on the company ‘tremendously.’
“Some of us do not have big harbors that could bring in larger ships to offload,” said Mayor Victorino. “And so we depend on Young Brothers to bring almost 90 percent of all the produce, all of our food and all the necessities that this county exists off.”
And company officials say if it doesn’t get help, it will have to “prioritize revenue-generating lines of service” ― potentially putting at least some of those islands at risk.
“We hope to avoid any disruption in service,” said Ana. “Support from the state Legislature would put the company on solid ground while we seek solutions from the Public Utilities Commission to achieve a more sustainable future for the company."
This story will be updated.
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