Caledonian MacBrayne - Business

Business

The company enjoys a de facto monopoly on the shipment of freight and vehicles to the islands, and competes for passenger traffic with number of aircraft services of varying quality and reliability. Nonetheless, few if any of the routes currently operated by CalMac are profitable, and the company receives significant government subsidies due to its vital role in supplying the islands - these routes are classified as "lifeline" services. In 1996 CalMac opened its first route outside Scotland, winning a ten year contract to provide a lifeline service to Rathlin Island in Northern Ireland.

Various versions of a local poem (based loosely on Psalm 24) refer to MacBrayne's long dominance of Hebridean sailings:

The Earth belongs unto the Lord
And all that it contains
Except the Kyles and the Western Isles
And they are all MacBrayne's

Several groups have proposed privatising the service, and there has been a long commercial and political struggle with a privately owned company, Western Ferries, which has run a rival unsubsidised service from Gourock to Hunters Quay (near Dunoon) since 1973. In 2005, the Scottish Executive put the collective Hebrides routes out to competitive tender, with the Dunoon route being a separate tender. Some island and union groups opposed the tendering process, fearing it would lead to cuts in services and could be a prelude to full privatisation.

During the tendering period, the company of David MacBrayne Ltd., which had been legally dormant for many years, was re-activated on 4 July 2006. David MacBrayne Group Ltd. acquired the full share capital of NorthLink Ferries Ltd, and took over operations of the NorthLink routes on 6 July 2006. Three operators submitted bids for the block of routes with CalMac retaining all its existing routes. During September 2006, David MacBrayne Group Ltd., acquired the entire share capital of CalMac Ferries Ltd. Thus, from leaving the hands of David MacBrayne 78 years earlier in 1928, the west coast ferry service returned to the fold in 2006, vastly enlarged.

At the time, no bids were made for the separate Gourock–Dunoon route and the service continued as before. In August 2006, David MacBrayne Group Ltd., directed two of its subsidiary companies, Cowal Ferries Ltd., and Rathlin Ferries Ltd., to take over operation of the Gourock to Dunoon, and Rathlin to Ballycastle services. Following a European Commission decision to not subsidise a passenger and vehicle service, the route was again put out to tender. In May 2011, Argyll Ferries Ltd, a newly formed subsidiary of David MacBrayne, was named as the preferred bidder for a passenger-only Dunoon-Gourock service. The timetable was extended into the early hours over weekends, with additional sailings integrated with rail services. Two passenger-only ferries, MV Ali Cat and MV Argyll Flyer (ex-Banrion Chonomara), were arranged for the run. When the service began on 30 June 2011, preparation of the Argyll Flyer was incomplete, and as an interim measure the cruise boat MV Clyde Clipper was leased from Clyde Cruises.