P&O axes 1,200 ferry jobs
EMBATTLED cruise ship company P&O is cutting its ferry fleet, closing all so-called Western Channel routes except Portsmouth to Bilbao and sacking around 1,200 staff, as part of an attempt to cut costs in its ferry operations.
The crossings from Portsmouth to the Normandy ports of Cherbourg, Le Havre and Caen will all go as part of a huge shake-up of the business. The company is also axing one route to Ireland.
The key Dover-Calais route will remain at its current frequency, but the fleet of eight ships will be reduced to six.
P&O said the move would allow it to slash the size of its ferry fleet, with the number of ships it operates going down from 31 to 23.
It is also cutting 1,200 jobs and transferring a further 350. The moves will cut the company's costs by £55m. The group's freight division, which has been growing at around 6% a year, will be expanded.
The drastic cost-cutting comes after years of increasing losses on its Normandy crossings. It will leave thousands of British second home owners in Normandy and Brittany facing much higher fares to reach their houses with the loss of the biggest ferry operator in the Western Channel.
P&O has faced increasingly tough competition on the cross-Channel routes with prices tumbling to 30-year lows even in the peak of summer.
As well as the Channel Tunnel, new cut-price operators have started on the Dover-Boulogne route this year and low-cost airlines have also taken a share of the market. The scrapping of duty free has led to a drop in day trippers. French tax increases on cigarettes also hit on-board sales.
P&O chief executive Robert Woods said: 'I am determined to see a major improvement in the profitability of P&O Ferries. While we greatly regret the possible job losses, we are convinced that what we are proposing is the best way forward for the long-term profitability of the business.'
Unions are meeting the company today but RMT leader Bob Crow has already threatened industrial action, declaring: 'We will draw a line in the sand at compulsory job losses.'
The North Sea is the only route that will remain unaffected by the changes. P&O's chairman Lord Sterling launched a review of P&O's ferries business this year after the company made a £40m loss in the last financial year.
The proposed measures will cost the company about £60m and result in a £240m write-off against its profits.
The withdrawal of P&O will leave French-owned Brittany Ferries as the dominant operator on routes to western French channel ports. Two of P&O's surplus ferries are being transferred to its rival.
Click here for more P&O news and an interactive share price graph.
