Prior to commencing operations, the company exercised great attention in the selection of the most advantageous route, as well as the optimal sites to establish bases at. It decided to focus its attention on the Ramsgate to Calais route, having identified this as possessing the perfect set of circumstances for a successful hovercraft route. Favourable factors at Pegwell Bay included a 10 miles out shelter from prevailing weather conditions when near the Goodwin Sands, while day-to-day timings could be adjusted to take advantage of both tides and winds. There was no need to negotiate the stone-walled entrances which would have been the case with Dover Harbour either.Least to say, the company was severely restricted as to its course of action. Folkestone was naturally out of the question because the harbour was run by British Rail. Moreover, there was no welcome from Dover to secure a hold lease at the Eastern Docks with British Rail members on the harbour board exercising their vetoes. This left Ramsgate as the only viable option. Hoverlloyd commenced operations from Ramsgate Harbour to Calais Harbour on 6 April 1966.
Initially, the company operated an interim fleet of SR.N6 hovercraft; services with these craft were passenger-only. Upon the launch of these services, it was publicly acknowledged that the SR.N6 was unable to compete with conventional ferries in terms of ticket price alone. Despite this, hovercraft services held a competitive advantage in that they were significantly faster than these ferries, being able to rapidly traverse the English Channel with 'flight times' reportedly as low as 22 minutes.
In addition to the provision of an initial revenue stream, SR.N6 operations provided valuable operating experience, guiding future routing decisions via knowledge of dominant weather conditions and such factors. These experiences were transferable to the company's larger hovercraft, however their vast difference in size and manoeuvrability somewhat dulled the value of such experiences. In particular, while the Goodwin Sands were historically avoided as a threat to conventional vessels, the hovercraft could easily operate in their vicinity without hindrance, free of other traffic concerns.
Between 1969 and 1977, Hoverlloyd took delivery of a total of four significantly larger SR.N4 hovercraft, capable of carrying 30 vehicles and 254 passengers; the type quickly replaced the SR.N6s on the Ramsgate-Calais link. The first craft was purchased at a cost of £1.2 million from the British Hovercraft Corporation. The SR.N4s were given the names Sure, Swift, Sir Christopher, and The Prince of Wales respectively.
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In 1969, in conjunction with the arrival of the first SR.N4s, Hoverlloyd re-positioned its services to run between the purpose-built Ramsgate hoverport and a similar facility just east of Calais harbour which was shared between Hoverlloyd and its rival Seaspeed. The development of suitable hoverports for the SR.N4 fleet had not come cheaply; Hoverlloyd incurred a significant cost to develop suitable infrastructure to facilitate its future operations, and thus commenced service after a relatively short prototype testing period.
Early on, hovercraft operations proved to be prone to disruption and abrupt cancellations on the part of adverse weather conditions, which were unfortunately common to the Channel. However, the impact of unfavourable conditions was eased over time by various modifications and improvements to the craft, such as increasingly durable rubber 'skirts', which had sustained damage from rough seas as well as ordinary wear-and-tear.
Other initial issues, such as hydraulic unreliability and equipment failures, were also partially attributable to worker unfamiliarity with the craft. A side effect of the hovercraft's high speed was a relatively bumpy ride. Benefits of the hovercraft configuration included an unmatched turnaround time, partly enabled by the ability to disembark/embark cars at both ends of the craft, whilst simultaneously facilitating the movement of foot passengers via two main exits on the port and starboard cabins. The capabilities of its SR.N4s were significantly augmented in 1973 with the delivery of the Mk.II modifications.
Competition with Seaspeed
Hoverlloyd was not the only hovercraft operator that decided to move on the cross-Channel market at the time; a rival company Seaspeed, owned by British Rail, was established and launched its own competing route between Calais and Dover. The two firms would compete with one another, as well as incumbent ferry operators, for market share throughout Hoverlloyd's existence.
Heyday of operations
Hoverlloyd principally concentrated on the Ramsgate to Calais link throughout the life of the company. By 1979, a typical day's operation at Pegwell Bay Hoverport involved 27 daily departures, starting as early as 6:00am and ending late in the evening; that year, 1.25 million passengers travelled by Hoverlloyd services on this route.
Furthermore, rival Seaspeed proved incapable of matching the reliability record of Hoverlloyd, which consistently operated over 98 per cent of scheduled crossings while maintaining an unblemished safety record throughout the firm's existence.
In 1975, Hoverlloyd was reportedly operating its fleet at near-maximum capability throughout the peak season; this feat was successfully repeated during the following year and again the year after that. According to Paine and Syms, the company had an attitude of optimism and confidence at the time, as it continued to expand its operations.
Sale to Broströms Rederi AB
From initial losses of -£250,000 in 1968 and -£164,000 in 1969, Hoverlloyd returned a profit in 1972 and continued to do so until 1980 with profit margins of 10.5% in 1976, 10.0% in 1977 and 7.0% in 1978. In 1976, with the company financially attractive, Broströms Rederi AB decided to purchase Swedish Lloyd's stake in Hoverlloyd, becoming the sole owner of the entire operation. Hoverlloyd would remain a wholly owned subsidiary of Broströms Rederi AB until 1981.
According to authors Robin Paine and Roger Syms, Hoverlloyd possessed excellent operational bases, a hovercraft-friendly route, a fleet capable of generating returns on investment, and good quality staff. Specifically, the company's customer-facing staff were strictly drilled and trained for their roles; stewardesses were required to maintain a high level of presentability, being compelled to wear their hair up, wear white gloves, and instructed how to apply their makeup.
Presentability and enthusiasm were considered to be competitive advantages over the rival Seaspeed's services. Staff typically displayed a high level of loyalty to the company, an outcome which has been attributed to the company's amenable management style, which positively affected industrial relations. Crew received extensive safety training, including weekly drills, so that they were able to readily respond to a wide range of emergency situations.
Duty Free Sales
Hoverlloyd sold various duty-free goods on board their SR.N4s during the cross-Channel transit. These sales comprising a meaningful portion of the service's overall revenue; thus the company strongly emphasised the importance of onboard sales amongst their staff. For example, in 1979, 30% of operating profits was accountable to duty-free sales.
Coach Services
For many years, Hoverlloyd operated a successful express coach/hovercraft/coach service from London to a number of near European cities with fares which were considerably cheaper than comparable air fares that were available at the time; the most frequent service was London - Paris, while London - Brussels had fewer departures. In 1978, these were the only two destinations; London - Amsterdam was added during 1979.
On the UK side, the coaches were operated with Hoverlloyd liveried coaches provided by Evan Evans Ltd - at that time a subsidiary of Wallace Arnold Tours of Leeds. Coaches did not cross the channel, although the hovercraft was able to readily accommodate standard-height coaches with luggage space at the rear.
Hoverlloyd examined various additional coach services; while considerable exploration of launching services reaching into the German market was performed, licensing issues allegedly proved to be complex enough to prevent further expansion.
Further Sea Routes
Hoverlloyd held ambitions to launch scheduled services to various other destinations throughout its life. Tentative plans to operate from Southend-on Sea to Ostend in Belgium were mooted but ultimately never progressed.
Economics of large hovercraft operation
Rising oil prices
Each SR.N4 was powered by an arrangement of four Bristol Proteus gas turbine engines; while these were marinised and proved to be one of the hovercraft's more reliable systems, they were relatively fuel-hungry, consuming significant amounts of aviation-grade kerosene. As the worldwide oil crisis of the 1970s caused fuel prices to rise sharply, the operation of the SR.N4 became increasingly uneconomic, especially in comparison to slower, diesel-powered ferries.
Non-Freight Business
Unlike ferry operators, Hoverlloyd was wholly reliant on non-freight business (cars and foot passengers), and unable to offset a decline in demand with other forms of business activities.
Debt Servicing
Hoverlloyd was a highly leveraged company with debt accounting for one-third of operating profits in 1976 and 1977 to two-fifths in 1978, three-fifths in 1979 and four-fifths in 1980.
Supply Chain
The closure of the British Hovercraft Corporation restricted support options, meaning that maintenance of the craft became more costly over time, and that neither like-for-like replacements or improved successor hovercraft were likely to be developed. Thus, Sure was taken out of service in 1983 and cannibalised for parts to keep the rest of the fleet operating.
These combined factors gradually worsened Hoverlloyd's balance sheet as time progressed and demanded economies of scale, and consolidation of operations.
