Shipping giant cuts routes to Spain
29 September 2004, LONDON - The shipping giant P&O, under increasing pressure from low-cost airlines and the Channel tunnel, is to cut four ferry routes, including some to Spain, and slash its workforce by 1,200.
29 September 2004
LONDON - The shipping giant P&O, under increasing pressure from low-cost airlines and the Channel tunnel, is to cut four ferry routes, including some to Spain, and slash its workforce by 1,200.
Most of the jobs are expected to go at P&O's Portsmouth, Dover and Calais operations.
The company said late Tuesday the overhaul - which will reduce the number of ships it operates from 31 to 23 - will save around GBP 55 million a year.
The cuts, which apply to ferry routes across the western Channel, will leave only one boat operating the route between Portsmouth and Bilbao, in northern Spain.
The number of ships on P&O's busy Dover-Calais route will be cut from seven to six.
The company said its tourist traffic had been "adversely affected by fewer day trips and the expansion of the low-cost airlines". Its loss-making ferry routes between England and France have been hit by competition from airlines such as EasyJet and Ryanair as well as the Channel tunnel, which now accounts for around 42 percent of cross-Channel traffic.
An increase in French tobacco duty has also affected passenger numbers, making "booze cruises" across the channel to stock up on cheap alcohol and tobacco less attractive.
A ferocious price war has developed among ferry operators, with prices this summer hitting their lowest level for 30 years.
In an effort to stem losses in its ferries division, P&O last year cut 525 jobs on its Dover-Calais "Short-Sea" ferry route by removing one vessel from service and introducing no-frills night time crossings.
Losses, however, continued to mount - in the six months ending on June 30, operating losses at the ferries business increased to GBP 25.1million.
Despite the problems, the P&O share price has been riding high, and last week hit 256 British pence, its highest level since January.
[Copyright EFE with Expatica]
Subject: Spanish news