In 1932, the Sydney Harbour Bridge was opened, and Sydney Ferries Limited's annual patronage dropped from 40 million to about 15 million.
As part of economy measures, older and/or most of the larger steamers were put up for sale.
The five "Lady-class" ferries, however, were kept in service and converted to diesel power in the 1930s with Lady Chelmsford first.
Their tall black smoke stacks were replaced with short funnels.
Facing uncertain post-Bridge times, Sydney Ferries Ltd sought a refreshed look for their ferries, covering the original livery of varnished timber and white trim with yellow and green paint and red trim.
In 1936, Lady Denman re-entered service with a six-cylinder 170 kW (228 bhp) L. Gardner and Sons diesel.
The five "Lady" ferries continued to run the Hunters Hill and Balmain services.

The post-Bridge drop in demand for the ferry fleet was somewhat mitigated as many could not afford their own transport in the Great Depression of the 1930s and rationing of fuel during World War 2 made the coal required for the steam ferries relatively cheap.
After the cessation of the Lane Cover River runs, lady Denman and her sisters ran services to Cockatoo Island during World War II.

However, the post World War II years saw the drop in demand pick up pace.
In 1951, with annual patronage down to 9 million, the NSW State Government took over Sydney Ferries Limited and its remaining fleet and assets.
The Port Jackson and Manly Steamship Company, which ran the Manly service, was paid to run the services.
The services and fleet were quickly rationalised with most of the larger remaining timber K-class steamers being decommissioned, however, the five relatively small and economical "Lady-class" ferries were retained.
Throughout the remainder of the 1950s and into the 1960s, they became the back-bone of Sydney Harbour's non-Manly ferry fleet, along with Karginal and Karrabee the smallest of the K-class ferries.
Their routes were expanded to all inner-harbour (ie, non-Manly) services including Taronga Park Zoo, Milsons Point, Cremorne and Hunters Hill.

The five sister ferries (except Lady Scott) were re-engined again in the late 1950s and early 1960s.
Lady Denman received a 4-cylinder 224 kW (300 bhp) Crossley Brothers diesel.
On 29 August 1965, she ran aground near Shark Island.
Her passengers donned life jackets and rehearsed speeches which invoked the Titanic.
In 1932, the Sydney Harbour Bridge was opened, and Sydney Ferries Limited's annual patronage dropped from 40 million to about 15 million. As part of economy measures, older and/or most of the larger steamers were put up for sale. The five "Lady-class" ferries, however, were kept in service and converted to diesel power in the 1930s with Lady Chelmsford first. Their tall black smoke stacks were replaced with short funnels. Facing uncertain post-Bridge times, Sydney Ferries Ltd sought a refreshed look for their ferries, covering the original livery of varnished timber and white trim with yellow and green paint and red trim. In 1936, Lady Denman re-entered service with a six-cylinder 170 kW (228 bhp) L. Gardner and Sons diesel. The five "Lady" ferries continued to run the Hunters Hill and Balmain services. 
The post-Bridge drop in demand for the ferry fleet was somewhat mitigated as many could not afford their own transport in the Great Depression of the 1930s and rationing of fuel during World War 2 made the coal required for the steam ferries relatively cheap. After the cessation of the Lane Cover River runs, lady Denman and her sisters ran services to Cockatoo Island during World War II.
However, the post World War II years saw the drop in demand pick up pace. In 1951, with annual patronage down to 9 million, the NSW State Government took over Sydney Ferries Limited and its remaining fleet and assets. The Port Jackson and Manly Steamship Company, which ran the Manly service, was paid to run the services. The services and fleet were quickly rationalised with most of the larger remaining timber K-class steamers being decommissioned, however, the five relatively small and economical "Lady-class" ferries were retained. Throughout the remainder of the 1950s and into the 1960s, they became the back-bone of Sydney Harbour's non-Manly ferry fleet, along with Karginal and Karrabee the smallest of the K-class ferries. Their routes were expanded to all inner-harbour (ie, non-Manly) services including Taronga Park Zoo, Milsons Point, Cremorne and Hunters Hill.
The five sister ferries (except Lady Scott) were re-engined again in the late 1950s and early 1960s. Lady Denman received a 4-cylinder 224 kW (300 bhp) Crossley Brothers diesel. On 29 August 1965, she ran aground near Shark Island. Her passengers donned life jackets and rehearsed speeches which invoked the Titanic.
MV Lady Denman