Japan's Kyushu Railway Company, or JR Kyushu, said Monday that it will withdraw from the passenger ship business operated by a subsidiary.
The business is run by JR Kyushu Jet Ferry, which covered up a water leak incident on its Queen Beetle high-speed passenger ferry linking Hakata Port in Fukuoka Prefecture with the city of Busan in South Korea.
JR Kyushu concluded that it would not be able to guarantee the safety of the ferry operations even by implementing safety measures.
The subsidiary will be dissolved after cooperating with criminal investigations. Its employees are expected to join JR Kyushu or group companies.
"We apologize to those who hoped for a resumption of the ships' operations," JR Kyushu President Yoji Furumiya told a news conference.
JR Kyushu began the passenger ferry service in 1991. The number of passengers reached some 350,000 in 2004.
The Queen Beetle entered service in November 2022, but JR Kyushu Jet Ferry was found to have kept operating the ship for three and a half months from February this year while hiding the water leak.
Japan's transport ministry imposed administrative penalties on the subsidiary, including an order to dismiss officials including an operation manager.
JR Kyushu considered preventive measures and repair of the ship, such as welding the hull. But the company decided to quit the passenger ferry business altogether, taking into account the stiff competition mainly from budget airlines and the difficulties of repair.
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