SeaFrance blames competition for another deficit year

French Channel ferry operator SeaFrance is heading for another deficit this year after announcing a net loss of E9.27m ($11.58m) on its activities in an "abominable" 2005. The company, which is controlled by state-owned French railway operator SNCF, said that its deficit this year would be much reduced, however, and that it was looking to return to break-even in 2007. "The deficit is going to be infinitely smaller this year," said management board chairman Eudes Riblier. "We will not break even but we will have a deficit brought completely under control."

At the end of the first half of this year, the company was already recovering strongly, with a 40% increase in freight revenues and a 15% rise in passenger and tourist vehicle revenues in the same period last year. Last year, the company saw its passenger total slip 0.5% to 3.21m and its tourist vehicle total fall 5.9% to 602,000 on a market which was virtually stable. Lorry carryings progressed 8% to 679,000, however, on a market which gained 2.9%.

Chairman Eudes Riblier said that prices were recovering after being cut by up to 50% in some categories last year but acknowledged that it was unlikely that they would return to their pre-fall level. "In relation to 2000 and 2001, rates are definitively down by 20 to 30% but not 50%," he said. SeaFrance, which saw its turnover fall nearly 8% last year to E192.01m, was particularly affected by competition from low-cost operator SpeedFerries. Mr. Riblier said that, despite its small size, SpeedFerries had forced its competitors to align their best offers in the tourist vehicle category on its prices.

He added that Norfolkline was in the process of joining it as a low-cost operator as it expanded passenger capacity on the three new ships it was in the process of introducing on its Dunkirk-Dover service. SeaFrance estimates that it also lost revenues totalling E10m as a result of berthing problems at the port of Calais following a linkspan collapse in early February, while industrial relations problems caused further revenue losses. The company has since taken wide-ranging measures to bring its operating costs aboard ship and onshore into line with its reduced revenue expectations.

A new crewing agreement concluded with the leading seafarers' union at SeaFrance last month will lead to the loss of 45 mainly fixed contract positions aboard ship, while a similar number of shore positions are also to be eliminated. Mr. Riblier revealed that the company was planning to bid for the management concession for the management of the Transmanche ferry service between Newhaven and Dieppe, for which its main backer, the Seine Maritime departmental council, recently invited expressions of interest. Le Havre-Portsmouth operator LD Lines has also said it is interested and Corsica Ferries is also thought to be ready to bid.

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