We need to know the difference between hovercraft and boat for purchase price, maintenance, staffing, fuel consumption. With faster travel, a hovercraft should be making more journeys per day to earn its keep too. I suspect the last factor is very important.
That is very true, and does suggest the hovercraft might have lower costs. (On the other hand: How many people can the hovercraft fit in one trip vs the ferry?) We also need to remember that successful businesses generally don't only consider costs when deciding on their prices. Mainly, the price will be determined by what the business thinks people are willing to pay: A successful business will try to charge the prices that maximise its revenue. And if that more than covers costs, the business will remain solvent and profitable. Most businesses will also try to charge more to customers willing to pay more, and less to customers not willing to pay as much (hence advance tickets and student railcards, both of which allow train companies to get passengers who wouldn't be willing to pay as much, while continuing to charge higher prices to people who are willing to pay higher prices).
That ideas doesn’t float with me, surely people choose depending on speed, reliability and comfort? Admittedly on reliability and possibly comfort the ferry wins (especially compared to their old AP88 craft) but you’ve got the option to go on something that is the *WORLDS ONLY* for something significantly cheaper than a generic passenger cat.
Obviously this is all very well related to stock for the future of the island line though!
Some people will certainly choose comfort over speed: For evidence for that, look at the Far North Line: It's slower than buses and so would have next to no passengers if it was all about speed.
Thinking about 'what you can get away with charging' rather than just costs, I'm guessing that advantages the ferry has are possibly: More pleasant journey with the ability to stroll outside and admire the view, perception of being less noisy, better connections with the train (true at both ends, but probably a bigger factor at the Portsmouth end), fares easier to find online if connecting by train. Also, for tourists, speed might not be a factor or might even work the opposite way from what you expect: Some tourists might consider a boat ride to be pleasant/unusual enough that they'd prefer a longer ride.