Second ferry company warns of job losses
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A second
cross-Channel ferry company has warned there could be a job losses
as the industry faces some tough economic times.
The warning, from LD Lines, which operates between Dover and
Boulogne, follows the announcement by P&O Ferries to its
staff that there's "serious concern" about
its performance.
The firm, which employs around 2,000 people in Dover, has
blamed competition from Eurotunnel and tough market conditions.
In a memo to staff, chief executive
Helen Deeble said: "Trading remains tough right around
the business.
"Our industry is still in the grip of
strong recessionary pressures and our belief is that it is going to
take a very long time before things return to normal.
"As a result, all of our sectors are
struggling at present."
Staff were warned this was due to
strong competition which is hitting P&O's business hard.
The memo added: "This attack, in the
form of a price war, emanates primarily from Eurotunnel which has
slashed its freight rates to win back the market share it lost to
us after the tunnel fire in the autumn of 2008.
"This has cost us a loss of freight
volume and a significant downturn in revenues due to the lower
prices we are having to charge our customers.
"At the same time, Eurotunnel and
ferry competitors are piling on more pressure with weekend
promotions that have further depressed freight rates and we have
been forced to fight back with special freight deals of our
own.
"The squeeze also applies to our Short
Sea tourist business where ferry competitors with lower costs than
ours are constantly reducing their prices.
"This all means we are being forced to
reduce costs throughout the business in order to be able to
compete.
"It is therefore important I highlight
to you at the earliest opportunity that our current performance is
of serious concern and that it is going to require urgent
attention.
"We have also started to communicate
these messages to the European Works Council and to the trades
unions representing members of our workforce.
"The board is currently considering
all of its options. No decisions have yet been taken but we will
have completed our assessment in time for the preparation of next
year’s budget in the early autumn.
"We will keep you informed
accordingly."
A spokesman for LD Lines said that like all other ferry
operators on the Dover Strait, the company is experiencing a very
depressed market, tough trading environment and the aggressive
pricing policy from Eurotunnel, all affecting volumes.
"The market needs to rectify supply and demand balance to have a
chance of becoming profitable again and ensure long term survival
of the ferry industry, particularly across the Dover Strait," said
the spokesman.
"We have options to retain the two vessels Norman Bridge and
Norman Trader which must be declared by August 15.
"At this stage we have not yet exercised these options, hence
the communication of Navitaship. The company has not yet decided
and there is a possibility we will exercise an option for at least
one of these ships. We are also considering alternative tonnage on
the Dover – Boulogne service, which may not include Norman Bridge
and Norman Trader.
"We are currently assessing all possible options and we expect
to able to complete and announce our plan going forward from the
middle of this month."
The spokesman stressed tghat no decisions had yet been
taken pending ongoing review of the various options.
Friday, August 06 2010
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