Smyril compromise on the table

Shetland may agree a compromise to resolve their legal dispute with Faroe ferry firm Smyril Line, which wants to stem its enormous financial losses by dropping the islands from its summer schedule.

This week Smyril managers proposed abandoning the Lerwick - Bergen leg of the ferry Norröna's 2007 timetable, while retaining the direct connection between Shetland, Faroe and Denmark.

Shetland Development Trust (SDT), which owns a £4.5 million stake in Smyril, will consider the proposal today (Friday) along with the company's other two major shareholders, both of whom are Faroese.

Meanwhile suggestions have been aired that Shetland could look into buying into an alternative summer ferry service which could link the islands with Norway and mainland Scotland.

Ever since Smyril Line started operating the new £60 million Norröna in 2002 the company has lost money, largely due to the cost of running such a huge vessel during the winter months when the North Sea travel trade is very light.

After several failed attempts to rescue the company's finances through deals with other operators, Smyril management have targeted Lerwick as the weak link in the route, saying it costs £10,000 every time the Norröna visits Britain's most northerly port.

Last month SDT lost a court action in Faroe to stop Smyril from erasing Lerwick altogether from its 2007 summer schedule and shifting its UK connection to a Scottish mainland port.

The trust immediately appealed to the Danish High Court, but if the latest compromise is agreed the action will be dropped.

Shetland Islands Council convener Sandy Cluness, who sits on the Smyril board for SDT, said that next year Smyril wanted to replace Lerwick with Scrabster as its summer UK link with Norway, while keeping the Shetland connection during the shoulder season in spring and late summer.

Clearly unhappy about losing the Norway link, the SIC convener said as shareholders SDT had to think about what was best for the company's finances as well as what was best for Shetland.

"We appreciate that the company is losing money and we have to think of every way we can of saving money to ensure the Norröna keeps coming here in the future," Mr Cluness said.

The trust is not convinced that Smyril will actually save money by swapping Lerwick for Scrabster, but is likely to allow the experiment to go ahead.

But the direct connection to Bergen is seen as vitally important to building Shetland's Scandinavian tourist trade and if the compromise goes ahead there will be afforts made to establish an alternative route across the North Sea.

In years gone by ferry operators P&O operated a direct link between Lerwick and Bergen, and the idea of Shetland exploring a similar operation through a joint venture with a shipping firm using a smaller vessel has already been floated.

One suggestion is to introduce a round service incorporating Rosyth, which would provide much needed extra capacity during the summer months between Shetland and the Scottish mainland.

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