Ferry companies square up
May 20, 2011
P&O Ferries has lodged a complaint with the European Commission, accusing rival SeaFrance of receiving state aid in disguise, via its parent company SNCF, resulting in unfair competition on the Dover-Calais route .
A French court recently granted SeaFrance a six-month extension in its period in administration which now runs to 27 October 2011. It has been in administration since June 2010.
Last month, the French state submitted proposals to the EC, requesting that it approve a recapitalisation plan for SeaFrance, with the injection by SNCF of more than €200 million (US$285m) into its ailing subsidiary.
A P&O Ferries spokesman told IFW: “The gist of the complaint we have submitted to Brussels is that SeaFrance has soaked up huge amounts of money from SNCF over the years, and continues to benefit from this financial back-stop.
“This not only allows SeaFrance to remain in business, but to cut prices to commercially unviable levels. It amounts to a huge distorsion of competition.
“All we are demanding is a level playing field, “ he added.
P&O Ferries is not alone in pointing the finger at SeaFrance. Last month, in addressing shareholders, Jacques Gounon, Chairman of Eurotunnel, highlighted a price war on Channel Straits routes, implying that SeaFrance was the prime mover, because it could call on state subsidies unlike its rivals.
Recapitalisation appears now to be SeaFrance’s last chance of survival, sale plans having been withdrawn earlier this year after no offers were received.
A rescue plan for the ferry operator makes provision for 725 redundancies out of a workforce of 1,600 (the vast majority of these have already been implemented) and an operation based on three ferries – the Rodin, Berlioz and Molière, and the freight-only Nord Pas De Calais (pictured).
The EC competition directorate will have to consider the efforts that have been made by SeaFrance’s management in trying to turn the company round and what the impact of a collapse of SeaFrance would have on the local economy in Northern France, if it refused to green-light the recapitalisation.
It must also take into account the long-standing argument of SeaFrance’s rivals that fair completion is being flouted on the Dover-Calais route and that more cash for the SNCF operator will just perpetuate the problem.
