Displaying items by tag: Recovery Course

19th March 2021

Brittany Ferries Charts Recovery Course, After Worst Year in Decades

The Breton based ferry operator, has experienced some of the most disappointing figures in its history, since its inaugural sailing in 1973 between France and the UK. Above Armorique, Afloat adds the cruiseferry (operating in freight-mode) is to sail from St.Malo and due to arrive to Cork Harbour tomorrow afternoon.

Operator, Brittany Ferries has published some of the most disappointing figures in its history, following its AGM in St. Pol de Leon, France today.

In a year dominated by the Covid crisis and amid on-going Brexit concerns, 2020 passenger numbers fell to less than a third of normal levels. Freight fared slightly better, with figures down by 20 per cent. Company turnover halved, as lockdown measures and restrictions on travel in all markets forced passengers to stay at home.

Despite a dreadful 2020, the company is already plotting a course towards a brighter future. It has embarked on a robust five-year recovery plan to bridge the immediate crisis and prepare for a return to normal service.

It has also commissioned an independent analysis of the passenger market by London-based consultancy LEK. Their findings suggest that passenger volumes are expected to have recovered to 2019 levels by 2022. Freight volumes are also expected to improve. Thanks to its five-year recovery plan - and with ongoing support from banks and the French government - Brittany Ferries says it can therefore look beyond the current storm with optimism.

“In the last few years Brittany Ferries faced a double strike, firstly as a consequence of Brexit challenges and then as a result of Covid,” said Jean-Marc Roué, company president. “On Brexit, the unfavourable Sterling-Euro exchange rate hit our bottom line. The value of Sterling plummeted directly after the 2016 vote and, since then, the company lost €115 million in potential income as the majority of revenue is generated in Sterling and costs come in Euros.

Brexit concerns also affected demand. Three potential dates for the UK’s departure from the EU in 2019 created uncertainty and anxiety in the marketplace and passenger numbers fell by 5%. Despite these challenges, we remained profitable.

However, last year, the Covid crisis brought our company to its knees. It struck a blow for the regions we serve and enrich, and the French seafarers we are proud to employ. Despite this, we are determined to remain part of the fabric of life in the north west of France as well as in the UK, Ireland and Spain and we must thank the regions of Normandy and Brittany, the banks and French state for their on-going support throughout this dark period. With a collective will to return stronger, I believe Brittany Ferries will overcome the greatest challenge in its history.”

Passenger numbers:
Passenger numbers: Last year, Brittany Ferries carried 752,102 passengers. That was less than a third of the total it would carry in a normal year. By comparison, in 2019 it carried 2,498,354 passengers across all routes

Around 85 percent of passengers are British. In 2019, the uncertainty of three potential Brexit deadlines created concern among passengers which hit demand for travel. Total passenger traffic fell by 5 percent in 2019 to 2,498,354. However, this dip was dwarfed by the 70% crash in passenger volumes last year, caused by government restrictions that prohibited international travel.

Around 80 percent of company income is generated through passenger traffic: the effect that travel restrictions had on turnover was therefore devastating. In 2020 the company turned €202.4 million, compared with €469m in 2019, a 57% decline.

Freight figures:

Brittany Ferries largely returned to its roots as a freight-only operation towards the end of last year. in total it carried 160,377 units in 2020, down around 20 percent on the previous year’s tally of 201,554. Market distortions were caused by stockpiling at the end of the Brexit transition period and amid concerns about new border controls and import/export processes. The Covid crisis also impacted freight volumes, albeit not as significantly as it did for passenger traffic.

Freight figures In total Brittany Ferries carried 160,377 units in 2020, down around 20 percent on the previous year’s tally of 201,554. Market distortions were caused by stockpiling at the end of the Brexit transition period and amid concerns about new border controls and import/export processes. The Covid crisis also impacted freight volumes, albeit not as significantly as it did for passenger traffic

Highlights in 2020:

In an otherwise miserable year, there were some notable highlights for Brittany Ferries.

It won the third in a series of Brexit-related ferry contracts with the UK government (Department for Transport, DfT). This guaranteed DfT space aboard vessels to ensure the supply of essential goods like medicines in the event of potential chaos at short-sea ports on the Channel. As well as supporting routes like Le Havre to Portsmouth, these contracts reinforced the strategic significance of Brittany Ferries’ route network to national governments, as well as to local regions.

Thanks to the flexibility of its fleet the company was also able to meet demand from Irish and French hauliers to open direct routes connecting Ireland with France, thus avoiding the need to transport goods via the UK land-bridge.

The “ferroutage” multimodal project also progressed, reflecting a wider trend in the ferry sector to link ferry services with European rail routes. Work began on the SNCF rail network which will allow freight to be carried by train between Bayonne and Cherbourg. Freighter MV Cotentin made a welcome return to the fleet, in preparation for the project launch in 2022. She adds capacity to the route network and started operations by supporting DfT contracts in early 2021.

In December 2020, the company welcomed its new ship Galicia to the fleet. This greener super-ferry, part of investment made before the Covid crisis struck, operates two weekly rotations between the UK and Spain and one from Cherbourg to Portsmouth. Like the ferroutage project, Galicia’s launch illustrates the company’s commitment to more environmentally friendly modes of transport and a drive towards energy transition.

Recovery plan

Energy transition is one of the four pillars of an internal recovery plan that will deliver Brittany Ferries from the current crisis. The five-year plan spans the period in which the company is expected to pay back loans that have helped carry it through the bleakest summer and winter in decades.

Greener vessels are essential for the company’s future, both from the perspective of anticipated regulatory requirements and the expectations of its customers. Two further E-Flexer class vessels will join sister-ship Galicia in 2022 and 2023. Salamanca and Santoña will be powered by liquefied natural gas (LNG) and the infrastructure to support LNG bunkering will begin construction in Bilbao this year in preparation for their arrival.

As well as energy transition, Brittany Ferries had reaffirmed its commitment to the French flag and French seafarers. It salutes all its employees for their support, understanding and hard work during an unprecedented period of disruption - and has called for all French seafarers to be recognised as essential workers.

The third pillar of Brittany Ferries’ recovery plan is the support it receives from farming cooperatives and its shareholders. The commitment and determination of Brittany Ferries’ founders, and the French farmers who continues to support it today, is reflected in a will to continue the journey taken by the company since 1972. Enriching regions, linking people and facilitating trade between nations is in the company’s DNA.

The final pillar of the plan re-states the imperative of profitability. This is essential if recovery is to be sustained. The pillar goes hand-in-hand with on-going support from the regions, banks and government for which the company is grateful.

Difficult decisions to limit costs have already been taken, for example delaying the opening of routes the company had planned to re-start in March 2021. However, the goal is always the long-term viability of Brittany Ferries and there is good news on the road ahead. Independent analysis has confirmed that, following short term shock, passenger demand is likely to return quickly to support a strong and sustained recovery.

Independent analysis

As part of recovery planning Brittany Ferries commissioned an independent review of the passenger market by London-based consultancy LEK. In a wide-ranging study, they looked at external evidence such as projections for the UK economic recovery and internal factos such as customer profiles. Its conclusions were encouraging both in relation to challenges posed by both Covid and by Brexit. A rapid and full recovery in passenger volumes is forecast within the next few years.

On Covid, LEK predict a return to 2019 volumes by 2022:

“The relative stability of Brittany Ferries’ passenger volumes over the last 12 years demonstrates resilience. It has an advantaged catchment area with customers who show high loyalty and repeat rates; 70% of bookings come from repeat clients, 27% from those who made more than nine reservations in the last three years.”

On Brexit, LEK suggest that concerns should be short-lived, noting that changes to the pet travel scheme are the only significant change for passengers. Pet travel accounts for around 6% of the company’s business. However, even this year, all pet-friendly cabins have already been booked for summer 2021 on UK-Spain routes.

“While some consumers are currently concerned about Brexit’s impact on travel, these concerns should reduce as they become aware that actual restrictions are likely to have limited impact in practice,” LEK concluded.

Commenting on the year ahead and the conclusions of the LEK study, Brittany Ferries’ chief executive officer Christophe Mathieu added, “There is no doubt 2021 will be another tough year for our company. However, we will continue on the path to recovery, taking tough decisions if necessary but encouraged by the findings of this independent report which show the market is ready to bounce back.

We will always place the long-term interest of Brittany Ferries at heart and as long as we continue to be supported by our staff, shareholders, the banks, as well as by regional and national governments, I believe we can navigate a path through the storm. The future for Brittany Ferries can be as bright as the rich history which precedes it.”

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Changing Ocean Climate

Our ocean and climate are inextricably linked - the ocean plays a crucial role in the global climate system in a number of ways. These include absorbing excess heat from the atmosphere and absorbing 30 per cent of the carbon dioxide added to the atmosphere by human activity. But our marine ecosystems are coming under increasing pressure due to climate change.

The Marine Institute, with its national and international partners, works to observe and understand how our ocean is changing and analyses, models and projects the impacts of our changing oceans. Advice and forecasting projections of our changing oceans and climate are essential to create effective policies and management decisions to safeguard our ocean.

Dr Paul Connolly, CEO of the Marine Institute, said, “Our ocean is fundamental to life on earth and affects so many facets of our everyday activities. One of the greatest challenges we face as a society is that of our changing climate. The strong international collaborations that the Marine Institute has built up over decades facilitates a shared focusing on our changing ocean climate and developing new and enhanced ways of monitoring it and tracking changes over time.

“Our knowledge and services help us to observe these patterns of change and identify the steps to safeguard our marine ecosystems for future generations.”

The Marine Institute’s annual ocean climate research survey, which has been running since 2004, facilitates long term monitoring of the deep water environment to the west of Ireland. This repeat survey, which takes place on board RV Celtic Explorer, enables scientists to establish baseline oceanic conditions in Irish waters that can be used as a benchmark for future changes.

Scientists collect data on temperature, salinity, water currents, oxygen and carbon dioxide in the Atlantic Ocean. This high quality oceanographic data contributes to the Atlantic Ocean Observing System. Physical oceanographic data from the survey is submitted to the International Council for the Exploration of the Seas (ICES) and, in addition, the survey contributes to national research such as the VOCAB ocean acidification and biogeochemistry project, the ‘Clean Atlantic’ project on marine litter and the A4 marine climate change project.

Dr Caroline Cusack, who co-ordinates scientific activities on board the RV Celtic Explorer for the annual survey, said, “The generation of long-term series to monitor ocean climate is vital to allow us understand the likely impact of future changes in ocean climate on ecosystems and other marine resources.”

Other activities during the survey in 2019 included the deployment of oceanographic gliders, two Argo floats (Ireland’s contribution to EuroArgo) and four surface drifters (Interreg Atlantic Area Clean Atlantic project). The new Argo floats have the capacity to measure dissolved ocean and biogeochemical parameters from the ocean surface down to a depth of 2,000 metres continuously for up to four years, providing important information as to the health of our oceans.

During the 2019 survey, the RV Celtic Explorer retrieved a string of oceanographic sensors from the deep ocean at an adjacent subsurface moored station and deployed a replacement M6 weather buoy, as part of the Irish Marine Data Buoy Observation Network (IMDBON).

Funded by the Department of Agriculture, Food and the Marine, the IMDBON is managed by the Marine Institute in collaboration with Met Éireann and is designed to improve weather forecasts and safety at sea around Ireland. The data buoys have instruments which collect weather and ocean data including wind speed and direction, pressure, air and sea surface temperature and wave statistics. This data provides vital information for weather forecasts, shipping bulletins, gale and swell warnings as well as data for general public information and research.

“It is only in the last 20 years, meteorologists and climatologists have really began to understood the pivotal role the ocean plays in determining our climate and weather,” said Evelyn Cusack, Head of Forecasting at Met Éireann. “The real-time information provided by the Irish data buoy network is particularly important for our mariners and rescue services. The M6 data buoy in the Atlantic provides vital information on swell waves generated by Atlantic storms. Even though the weather and winds may be calm around our shores, there could be some very high swells coming in from Atlantic storms.”