Defiant Steam Packet bosses insist they will fight off any new threat of competition on the island’s sea services.
Chairman Robert Quayle vowed: ‘We will meet competition with competition.’
He admitted it was no coincidence the Steam Packet was announcing it has significantly cut its debt just hours before Ellan Vannin Line held a public meeting to outline its plans for the new daily cargo service to Heysham. A passenger service could follow by TT next year.
Ellan Vannin Line’s Captain Kurt Buchholz told the packed meeting at Noble’s Park Pavilion: ‘For me competition is always healthy - that’s what I believe in.’
He said it wasn’t his aim to ‘shed any blood’ but to co-exist alongside the Steam Packet, taking 25 per cent of the market share. Captain Buchholz said the company had secured berths at Douglas and Heysham and would launch a daily freight service from October using a ro-ro (roll on, rolloff) container vessel that could carry up to 40 trailers.
It could also carry containers, vans, cars, livestock, oversized goods, dangerous cargo and scrap. The boat would sail at 10am from Douglas, arriving at Heysham at 2pm, departing again at 7pm and arriving in Douglas at 11pm.
Announcing the SPC’s financial restructure, Mr Quayle said debts of about £200m had been ‘unsustainable’ and ‘totally disproportionate’. He said this had been ‘significantly’ reduced and was now at a level that is ‘manageable, sustainable and serviceable’. Mr Quayle declined to reveal the new level of debt, saying he didn’t believe that information was ‘relevant’. ‘It’s a private company that operates without any government subsidy – there’s no government bail-out here!’ he said.
{http://www.iomtoday.co.im/news/isle-of-man-news/steam-packet-cuts-its-debt-1-5893705|Click here to see our video interview}
He said one of the reasons the Steam Packet had wanted to make sure this information was in the public domain that day was because a potential competitor was suggesting the company’s financial situation was not secure. ‘That is patently untrue – we have a very robust financial situation,’ he said.
Mr Quayle said the concern was that if any competitor established any kind of ‘traction’ it would hit freight revenues which cross-support less economic services.
In turn, this could impact on passenger fares in the short term and investment plans for the future.
The majority of the Steam Packet’s passengers services are supported by freight.
The SPC chairman said the level of business on these routes ‘does not sustain sensible competition’ and he did not think it was in the best interests of the Isle of Man for the Ellan Vannin Line to start up its service.
But he vowed: ‘This won’t put us out of business. We’ll meet competition with competition. We are not going to sit back and lose business to a competitor.’
The Steam Packet last faced competition in 2010 when Mezeron launched a rival daily container cargo service to Liverpool. It lost 15 per cent of its freight service to Mezeron Estonian-registered chartered vessels, the Kalana and the Kurkse, but competition lasted less than five months.
At Friday’s public meeting in the Noble’s Park Pavilion, Captain Buchholz said the affect of competition would be to provide a ‘spark for the island’s economic engine’ leading to new ventures and boosting tourism.
It would lead to affordable prices and provide a back-up service in the event of a Steam Packet vessel breaking down.
He said he wanted to provide a career plan for seafaring staff but his comments that crew members would be paid international rates prompted exchanges with some in the audience who pointed out that Steam Packet staff are paid higher Manx rates.
There were also concerns expressed that price comparison figures he had supplied for the presentation may not be fair or accurate.