CLOSURE OF ROUTES ON IRISH SEA
DFDS closes down the operation of the routes between Dublin and Birkenhead and Heysham, England, at the end of January 2011
At the end of January 2011 the operation of the routes between Dublin and Birkenhead and Heysham, England, will to be closed down. Two ro-pax ships are deployed on the Birkenhead route and one ro-ro ship on the route to Heysham. Port terminal operations and sales agency activities in Dublin will also be closed. In recent years the routes have made substantial losses due to considerable overcapacity on the market. This is a result of a sharp decline in demand since 2008 and a lack of adjustment of capacity in the market.
Against this background it has not been possible to develop a business plan that would lead to a significant result improvement within a reasonable period of time. Likewise, it has not been possible to achieve a sale of the activities. A period of consultation has today commenced with the 50 land based personnel who will be directly affected with the aim of mitigating the consequences of any resultant redundancies. For the three owned ships deployed on the routes and their crews, a number of possible options are being investigated, including a sale, charter and alternative deployment on DFDS route network. One ro-pax ship is expected to be transferred to DFDS Baltic route network.
Consultation has commenced today with representatives of all crew affected. The closing of the routes will also result in the termination of several contracts with external suppliers. As a consequence of the route close down special cost items of approximately DKK 50m is expected in 2011, primarily during Q1. The revenue of the routes was DKK 275m in 2009.
Regrettable, but responsible solution
"It is with deep regret, that we close these routes. Despite an impressive effort from employees and a very comprehensive analysis of the market and evaluation of turnaround scenarios we have not succeeded in developing viable solutions for the routes. The market conditions in the area are quite simply too difficult and unfortunately we do not envisage any improvement in the near future," says Niels Smedegaard, CEO of DFDS.