In a year dominated by the Covid crisis and amid on-going Brexit concerns, Brittany Ferries’ 2020 passenger numbers fell to less than a third of normal levels, the company said.
Freight fared slightly better, with figures down by 20%. Company turnover halved, as lockdown measures and restrictions on travel in all markets forced passengers to stay at home.
Despite this, the company said it had 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 independent analysis of the passenger market by London-based consultancy LEK. The findings suggest that passenger volumes are expected to have recovered to 2019 levels by 2022. Freight volumes are also expected to improve.
“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, 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 mill 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 northwest 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,” he concluded.
Last year, Brittany Ferries carried 752,102 passengers. By comparison, in 2019 it carried 2,498,354 passengers across all routes.
Around 85% of passengers are British. Around 80% 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 mill, compared with €469 mill in 2019, a 57% decline.
Brittany Ferries largely returned to its roots as a freight-only operation towards the end of last year. In total, the ferry company carried 160,377 units in 2020, down around 20% 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.
Thanks to the flexibility of its fleet, the company was 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 landbridge.
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.
In December, 2020, the company welcomed its new ship ‘Galicia’ to the fleet. This environment friendly ropax, part of an investment made before the Covid crisis struck, operates two weekly round trips between the UK and Spain and one from Cherbourg to Portsmouth.
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, the company said.
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 the ‘Galicia’ in 2022 and 2023.
‘Salamanca’ and ‘Santoña’ will be powered by 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 said that it had reaffirmed its commitment to the French flag and French seafarers.
The third pillar of Brittany Ferries’ recovery plan is the support it receives from farming co-operatives 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.
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.
Commenting on the year ahead and the conclusions of the LEK study, Brittany Ferries’ CEO, 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,” he concluded.
