Optimization of the inter-island maritime transport in the Canary Islands in terms of social benefit and profitability

Abstract

The objective of the paper is to analyse the feasibility of possible improvements of the existing maritime network served by Ro-Pax ships in the Canary Islands. Net social benefits and financial results of the operating companies are used as performance indicators, as well as a generalized travel cost. These magnitudes are projected onto a long-term potential scenario 25 years ahead. The net social profit is calculated with consumer and producer surplus, what requires a modelling of both demand and supply for all these markets. The potential demand for the future scenario is estimated using a series of gravity models for both tourists and local passengers, passenger vehicles and freight transported in Ro-Pax ships. Financial profits of producers are calculated by estimating pricing and cost structure of the industry, whereas the generalized travel cost is calculated with ticket prices and monetized door-to-door travel time. Alternatives to routes connecting Tenerife, Gran Canaria, La Palma and Lanzarote are analysed. Results show a combination of positive or negative net social surpluses or financial results of the companies.