A more resilient user base and higher fares were among some of the key reasons for Dominion Bond Rating Service upgrading BC Ferries' long-term rating from A (low) to A.
DBRS said the company has weathered the economic downturn relatively well with a more resilient user base than originally anticipated. After years of experiencing declining traffic, BC Ferries expects volumes to rebound by 2% to 3%.
The ratings agency said rising traffic along with regulated fare increases of 3.74% on major routes and 7.25% on other routes, should improve the ferry corporation's earnings in its 2009-2010 fiscal year.
DBRS said enhanced marketing efforts, regulated fare cap increases and fuel surcharge mechanisms should continue to help generate adequate revenue growth. It also said tight management of services and expenses, a stabilizing debt burden should keep BC Ferries' earnings on an upward trend, although it said growth is likely to be less than previous years.