Less than a year after P&O announced 500 redundancies the shipping giant is admitting defeat in the face of declining booze cruise business; announcing yesterday that 1,200 jobs are to go along with eight ships and the closure of four out of its 13 routes.
The biggest Channel ferry company blamed rising competition from budget airlines and the Eurotunnel train service for taking business away. It said that weekend travellers had been pinched by tempting low costs flights to European destinations and slashed shuttle service prices.
Traditional booze cruisers were also being drawn to Eastern Europe by even cheaper alcohol and cigarettes said the ferry company. The 50% hike in French tobacco taxes had put a further nail in the P&O coffin, they admitted.
Despite price-matching deals offered by the company this summer passenger numbers have continued to go into decline. A million passengers a year had been lost since 1997 when 21 million people passed through Dover. That figure dropped to just 15 million last year.
P&O, Chief Executive, Robert Woods plans to lure passengers back with an overhaul that will focus on winning over premium paying customers.
The face-lift which will include new on-board shops will come at the price of staff cutbacks, however.
Along with the loss of approximately 1,200 jobs a further 350 jobs could be transferred.
The unions are angered by the news. NUMAST, the trade union representing more than 19,000 shipmasters, officers and other marine industry staff has warned that it will do ‘whatever is necessary’ to protect its members in the latest P&O Ferries restructuring.
NUMAST’s Paul Moloney commented: “This is a company that has clearly lost the plot and is lurching from one set of panic measures to the next. No sooner had the ink dried on one programme of rationalisation, than our members are facing fresh redundancies and changes in their terms and conditions. It’s no way to run a company and we believe it signifies the way in which P&O lacks any sense of strategic direction.
“Over the past five years, our members have had to fight off the effects of the Channel tunnel, the loss of duty-free sales, and the emergence of low-cost airlines and now they are having to fight the effects of incompetent management.”
Responding to the announcement, P&O chief Robert Woods said: “Whilst we greatly regret the possible job losses, we are convinced that what we are proposing is the best way forward for the long term prosperity of the business.”
Talks between NUMAST and P&O management are in progress.