Brittany Ferries plots recovery course, after worst year in decades
Brittany Ferries has published some of the most disappointing figures in its history, following its AGM in St Pol de Leon, France, according to the company's release. 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 percent. 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 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 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.
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.
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.
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.
About Brittany Ferries:
In 1967 a farmer from Finistère in Brittany, Alexis Gourvennec, succeeded in bringing together a variety of organisations from the region to embark on an ambitious project: the aim was to open up the region, to improve its infrastructure and to enrich its people by turning to traditional partners such as Ireland and the UK.
In 1972 BAI (Brittany-England-Ireland) was born. The first cross-Channel link was inaugurated in January 1973, when a converted Israeli tank-carrier called Kerisnel left the port of Roscoff for Plymouth carrying trucks loaded with Breton vegetables such as cauliflowers and artichokes. The story therefore begins on 2 January 1973, 24 hours after Great Britain’s entry into the Common Market (EEC). From these humble beginnings however Brittany Ferries as the company was re-named quickly opened up to passenger transport, then became a tour operator.
Today, Brittany Ferries has established itself as the national leader in French maritime transport: an atypical leader, under private ownership, still owned by a Breton agricultural cooperative. Eighty five percent of the company’s passengers are British.