Price war heats up on Dover Strait
Wednesday, 25 August 2010
LD Lines is to axe its Dover-Boulogne ro-pax service on 6 September, after the addition of a second vessel had failed to generate extra traffic.
The Norman Bridge will transfer from Dover-Boulogne to the service between Saint Nazaire and Gijon from 7 September.
The line is considering the future of the remaining vessel, Norman Trader.
MD Christophe Santoni said the line was also considering whether to continue the Dover-Boulogne route as a freight-only service with a single vessel.
Santoni added: “While we are disappointed to have to announce the ending of a service, we will continue to explore every option to try and maintain some form of ferry to Boulogne.
“While there remains huge overcapacity on the Dover Strait, we are addressing this issue by looking to see if a revamped service is economically sustainable, despite a continually difficult trading climate.”
Meanwhile, P&O Ferries warned its employees earlier in the month of its “serious concern” over lost volumes and revenue, and that staff cuts would not be ruled out.
In a letter to staff, CEO Helen Deeble accused Eurotunnel of sparking a price war and that the company was “currently under a strong attack from competitors”.
She wrote: “This attack, in the form of a price war, emanates primarily from Eurotunnel, which has slashed its freight rates to win back the marketshare it lost to us after the tunnel fire.
“This has cost us a loss of freight volumes and a significant downturn in revenues due to the lower prices we are having to charge our customers.”
However, Eurotunnel said it believed it was the ferries that were putting-in low prices.
CEO Jacques Gounon, in turn, accused SeaFrance of a “very aggressive” pricing strategy. He said the beleagured operator was able to do this because it was in administration and did not have to pay creditors.
French state-owned ferry operator SeaFrance has said it could run out of cash unless the European Commission grants its shareholder, SNCF, permission to inject emergency funds.
